McHenry Makes Second Request To The SEC For Records Concerning SBF Arrest

The Republican Congressman who serves as a core member of the House of Representatives Financial Services Committee, Patrick McHenry, has sent a second request to the Securities and Exchange Commission (SEC) for information regarding the arrest of the former CEO of FTX Sam Bankman-Fried.

Bankman-Fried, who was in charge of all operations of the popular crypto exchange, FTX, was arrested on December 13, 2022. This occurred after the Bahamas Police alleged he supported several financial offenses against the U.S. His action also fell short of the laws backing the Commonwealth of The Bahamas. The case is still undergoing investigations from regulators.

First Request Of The U.S. Lawmakers To The SEC

The United States lawmakers once expressed dissatisfaction with the charges, timing, and arrest of former FTX CEO Sam Bankman-Fried. This information came from the committee chair, Patrick McHenry, on February 10. He cited that the SEC’s cooperation and process with the DoJ (Department of Justice) were unclear.

As such, McHenry and Bill Huizenga, the committee Representative, demanded that Gensler, SEC’s chair, provides communications and records from his office, the commission, and the DoJ regarding SBF arrest. The data requested spans from November 2, 2022, to February 9, 2023.

Huizenga expressed his displeasure at seeing the incompliance of the agency’s chair. He noted in the tweet that the House GOP would hold him accountable since he has refused to abide by the policies he created by not appearing before the committee to speak.

Financial Services Chair Makes Another Request To Gensler

The House of Representatives Financial Services Committee has once again shown its dissatisfaction with the incompliance of the SEC chair, Gary Gensler. This is evident in its second letter of request to Gensler, demanding the documents on the charges and timing of SBF arrest.

The commission has remained silent over the committee’s request and missed all deadlines provided. Even after releasing documents with around 230 pages to the public, the SEC has yet to respond to the request.

Following the SEC’s action, the committee has set April 17 as the new deadline to provide the requested documents. The deadline comes with a warning, stating that failure to comply with the request will result in forceful action from the committee to obtain the requested data.

The letter from the committee members also comes with 14-page instructions on the reasons behind the demand for the documents. Meanwhile, the Financial Services chair, McHenry, had once tweeted that Gensler would report before the committee on April 18.

It’s now left to be seen how the SEC chair will respond to this call and how this will affect the already registered notion about the FTX case and the arrest of SBF.

SEC Activities Within The FTX Case

The FTX collapse was a ripple effect of several activities that occurred months before the fall of the exchange. The fall originated from SBF’s move to support failing digital asset exchanges amid the plunging crypto market. While this appeared as a good deed, SBF didn’t realize that his exchange would face a similar fate shortly.

The deals carried out at the time also involved the trading company of SBF, Alameda Research, which saw a series of losses due to the drop in cryptocurrency prices. This resulted in several companies, including Binance, withdrawing operations with the exchange and its native token, FTT.

The activities further raised the need for the exchange to file for bankruptcy, which it did on November 11, 2022, in Delaware, United States. Several investors and around 1 million FTX customers saw their income go down the drain due to the occurrence.

On November 15, 2023, Edwin Garrison, an FTX investor, sued SBF and several endorsers of the exchange in Florida federal court. On the following day, the United States House Financial Services Committee announced its plans to host a hearing in the following month to address the exchange collapse.

Effect Of FTX Collapse On The Cryptocurrency Market

The digital currency market had already plummeted significantly during the days leading up to the fall of FTX. However, following the collapse of the exchange were many bearish moves in the prices of several tokens. The impact was more glaring in November 2022, given that FTX handled daily transactions of about $1 billion.

At the moment, the market is still making several attempts to recover from the fall. Meanwhile, many other events resulting from the exchange crash occurred between November 2022 and April 2023, including the shutdown of Silvergate Bank roughly one month ago.

Certain crypto firms also cut down on staff capacities to get through the ongoing crypto market crisis. Some prominent examples include Messari, Polygon Labs, Dapper Labs, Elliptic, etc.

In the meantime, it’s impossible to tell the future status of the FTX exchange, as the case with the Securities and Exchange Commission remains on hold.