Crypto Exchange FTX Founder Attempted to Federally Regulate Exchange
Sam Bankman-Fried (SBF) was once among the most influential crypto entrepreneurs before allegations of misappropriation of users' funds.
Before FTX’s downfall, an allegedly leaked email exchange showed SBF’s intent to get the exchange federally regulated. The email was with a top regulator, and it was long before the collapse, demonstrating that SBF was trying to establish the business as a legitimate player in the cryptocurrency industry.
The invitation to meet SBF was mediated by former CFTC Commissioner Mark Wetjen, who had joined FTX US as the Head of Policy and Regulatory Strategy in November 2021. It was sent to the Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg, who agreed to meet the duo.
The FDIC spokesperson confirmed that the FDIC chairman met Bankman-Fried as part of “routine courtesy visits with leaders of financial firms and institutions.” These meetings are often used to discuss regulatory matters and to establish a relationship between the regulatory body and the firm. However, the collapse of FTX revealed SBF’s political ties, which were uncovered during parallel investigations.
Recent court documents revealed that SBF and five other former FTX and Alameda Research executives received $3.2 billion in payments and loans from FTX-linked entities. Bankman-Fried reportedly received the lion’s share of the funds at $2.2 billion. The exchange’s new management began conducting internal investigations to track down missing funds alongside federal investigations.
Sharing the FTX Debtors’ press release just issued: https://t.co/r7PlneGSXF
— FTX (@FTX_Official) March 16, 2023
The collapse of FTX and the subsequent investigations highlight the need for greater regulatory oversight in the cryptocurrency industry. As the industry continues to grow, it is crucial to establish clear guidelines and regulations to protect users and prevent fraudulent activities.
The events surrounding FTX demonstrate the importance of building strong relationships between regulatory bodies and crypto firms to promote transparency and accountability in the industry.