Republican Congressmen Call Out SEC’s Gensler in FTX Records Request

Timing of Sam Bankman-Fried’s arrest and charges “raise serious questions” about the SEC’s cooperation with the Department of Justice, elected officials say

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Artwork by Axel Rangel, modified by Blockworks

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Two Republican congressmen are the latest US politicians to join a growing chorus of those urging the SEC to share details around its correspondence with FTX founder Sam Bankman-Fried and the Justice Department.

Those requested communications center on regulators and prosecutors’ dealings around the arrest and charges against the bankrupt crypto exchange’s former chief executive.  

Reps. Patrick McHenry, R-N.C., and Bill Huizenga, R-Mich., called into question the SEC’s cooperation with the US Department of Justice in a Friday letter to SEC Chair Gary Gensler. 

McHenry is chair of the House Financial Services Committee, while Huizenga leads a House subcommittee that focuses on government oversight and related investigations. 

The congressmen gave the regulatory agency a Feb. 24 deadline to share all communications between employees of the SEC’s division of enforcement — as well as Gensler’s staffers — related to charges filed against Bankman-Fried. 

McHenry and Huizenga are also requesting related records of correspondence between the SEC and DOJ.

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Bankman-Fried was arrested in the Bahamas on Dec. 12. The following day, the SEC charged him with “concealing his diversion of FTX customers’ funds to crypto trading firm Alameda Research while raising more than $1.8 billion from investors.”

Similar charges were filed that day by the US Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission.

The SEC charges came the same day the FTX founder was set to testify at a hearing in front of the House Committee on Financial Services.

Maxine Waters, the committee’s top Democrat, said at the time she was “surprised” by Bankman-Fried’s arrest, adding the committee had been “working diligently for the past month” to secure his testimony.

“Presumably, the SEC’s Division of Enforcement did a complete investigation into the actions by Sam Bankman-Fried and presented the findings to the Commission for its review and to authorize the charges,” McHenry and Huizenga wrote in a Friday letter to Gensler. “Yet, the timing of the charges and his arrest raise serious questions about the SEC’s process and cooperation with the Department of Justice. The American people deserve transparency from you and your agency.”

An SEC spokesperson told Blockworks that “Chair Gensler will respond to members of Congress directly, rather than through the media.”

The letter comes after Rep. Ritchie Torres, D-N.Y., in December called for the Government Accountability Office to look into the SEC and its “failure to protect the investing public” from FTX — saying Gensler was “singularly responsible.”


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