A US lawmaker has asked the US Government Accountability Office (GAO) to investigate the actions of the Securities and Exchange Commission (SEC) in connection with the recent bankruptcy of cryptocurrency exchange FTX.
Congressman Ritchie Torres wrote to US Comptroller General Gene Dodaro on December 6, requesting that the GAO, the federal legislative watchdog, conduct a review of the SEC’s failure to protect the public from ” FTX’s egregious mismanagement and embezzlement.” The strongly worded letter also criticized Chairman Gary Gensler’s leadership in general. Torres wrote:
“Had the SEC done the due diligence of fully investigating FTX’s financials, there would have been a greater chance of exposing the exchange for what it really is: a house of cards built with monopoly money printed out of thin air.”
Other than that paragraph, Torres’s letter was almost entirely devoted to a critique of SEC Chairman Gary Gensler, who “by the logic of his own public statements, is singularly responsible for the regulatory failures surrounding the collapse of FTX and its subsidiary FX.US.” “. At Gensler’s insistence that most cryptocurrencies are securities and therefore subject to SEC regulation, Torres rhetorically asked:
“If the SEC has authority as Mr. Gensler claims, why didn’t they uncover the largest cryptocurrency Ponzi scheme in US history?”
NEW this morning — Rep. @RitchieTorres (D-NY) calls on the Government Accountability Office (@USGAO) to investigate the SEC’s “failure to protect the investing public from the egregious mismanagement and malfeasance of @FTX_Official” pic.twitter.com/BdT7ZVCM7X
—Alexander Grieve (@AlexanderGrieve) December 7, 2022
Torres, like Gensler, is a Democrat representing the South Bronx in New York. He is a strong supporter of cryptocurrencies. YoIronically, in March he signed a bipartisan letter led by Rep. Tom Emmer questioning the SEC’s authority to request information from cryptocurrency companies. Emmer has also questioned Gensler’s oversight after the FTX collapse.
On December 2, Torres presented bills entitled: “Require certain cryptocurrency exchanges to report to the Securities and Exchange Commission on proof of reserves, and other purposes” Y “Prohibit cryptocurrency exchanges from lending, leveraging or mixing customer funds without their consent.” The bills have been referred to the House Financial Services Committee.
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