Tom Emmer, the recently re-elected Republican legislator representing Minnesota’s 6th district in the US House of Representatives, has alleged that Securities and Exchange Commission Chairman Gary Gensler has been helping FTX CEO Sam Bankman-Fried, to achieve a “regulatory monopoly” through the cryptocurrency company.
In a tweet on November 10, Emmer critical Gensler for “running the media” amid FTX liquidity issues causing ripples throughout the cryptocurrency market. According to the Republican lawmaker, his team was investigating the SEC chairman’s alleged collaboration with Bankman-Fried and FTX, but he only cited reports submitted to his office as evidence without providing details.
Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We’re looking into this. https://t.co/SznowgcP6V
— Tom Emmer (@RepTomEmmer) November 10, 2022
Gensler speak on CNBC’s Squawk Box shortly before Emmer’s statement, and did not discuss the record that SBF met with SEC officials on March 29. The chairman of the SEC said that many similar meetings led to the same message to cryptocurrency industry leaders – “breaking the law is not going to work” – but did not confirm news that the regulator was investigating FTX US.
“When you mix a lot of customer money, lack of disclosure and leverage, borrowing against it – and within these companies trading – investors are hurt,” Gensler said, also citing the collapse of Terra. “This is a very interconnected world in crypto with a few players concentrated in the middle […] When the markets turned against them it seems like a lot of customers lost money.”
Bankman-Fried is no stranger on Capitol Hill, having testified in December 2021 before the House Financial Services Committee about the challenges cryptocurrency companies face regarding regulatory clarity. Committee Chair Maxine Waters issued a statement on Nov. 10 advocating for federal oversight of cryptocurrency trading platforms and consumer protection at a time when FTX was facing liquidity issues, but it did not suggest the kind of coordination between the exchange and the SEC that Emmer called for.
The current novel with FTX and SBF has caused extreme volatility in the entire cryptocurrency market and the concern of many users who are looking for the status of their funds. Bankman-Fried issued a public apology via Twitter on November 10, taking responsibility for not providing enough transparency during FTX’s “liquidity crunch.”
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