House committee announces hearing into FTX collapse featuring Bankman-Fried

The House Financial Services Committee will hold a hearing next month to investigate the collapse of top crypto exchange FTX, lawmakers announced Wednesday.

Reps. Maxine Waters (D-Calif.) and Patrick McHenry (R-N.C.), the top lawmakers on the committee, said in a statement that they expect disgraced FTX founder Sam Bankman-Fried to appear before Congress. 

“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds,” Waters said. 

“Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year.”

FTX declared bankruptcy last week after revealing that it lost billions of dollars in user deposits making risky bets through its affiliated trading firm Alameda Research. As many as 1 million users could face losses, according to a Tuesday bankruptcy filing.   

The shocking collapse prompted outrage and calls for regulation on Capitol Hill. Bankman-Fried, a major political donor, cultivated close connections with lawmakers on key committees and even helped write the first major crypto bill. Many members of Congress viewed FTX as one of the most reliable and trustworthy crypto companies.  

“Oversight is one of Congress’ most critical functions and we must get to the bottom of this for FTX’s customers and the American people. It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system,” McHenry said in a statement. 

FTX joins a growing list of crypto firms to go under this year amid falling crypto values. Its downfall seems certain to doom other companies that relied on FTX for funding, including crypto lender BlockFi, which is reportedly preparing for bankruptcy.