Gensler ‘Singularly Responsible’ for Failing To Expose FTX Fraud, Rep. Says

Rep. Torres’ call for investigation comes months after he and several other representatives drafted a letter to Gensler asking about the SEC’s jurisdiction over non-SEC regulated entities

article-image

Rep. Ritchie Torres | lev radin/Shutterstock.com

share

A member of the House Committee on Financial Services is calling for the Government Accountability Office, known as Congress’ investigation arm, to look into the SEC and its “failure to protect the investing public” from FTX. 

Rep. Ritchie Torres, D-N.Y., drafted the letter, dated Tuesday. 

“Chair Gensler took the position that the SEC had clear authority to investigate crypto exchanges,” Torres told Blockworks via email.

“When it comes to government failure, the public official singularly responsible for failing to expose the FTX fraud is SEC Chair Gary Gensler.”

Torres also referred to the SEC’s handling of FTX as “egregious mismanagement.” 

“If he had clear authority to do so, why did he fail to uncover the largest crypto Ponzi scheme in history?” Torres added. “It is on Congress to pass laws, but it is on the regulators to apply those laws to conduct investigations, and in the case of Gary Gensler, the regulators failed catastrophically. Chair Gensler has some explaining to do.”

Torres’ call for investigation comes months after he, along with Reps. Tom Emmer, R-Ind., Josh Gottheimer, D-N.J., Jake Auchincloss, D-N.J., Ted Budd, R-N.C., Warren Davidson, R-Ohio, Byron Donalds, R-Fl., and Darren Soto, D-Fl., drafted a letter to Gensler asking about the SEC’s jurisdiction over non-SEC regulated entities. 

“The SEC’s regulatory functions, while broad, are limited to the extent of its statutorily mandated jurisdiction,” the letter, published in March 2022, read. “It appears there has been a recent trend towards employing the Enforcement Division’s investigative functions to gather information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards for initiating investigations.” 

The letter does not mention any specific cryptocurrency companies representatives were concerned the SEC was investigating, FTX or otherwise. 

Torres did receive campaign donations linked to FTX founder Sam-Bankman-Fried, according to Federal Election Commission filings, but the Congressman elected to donate his contribution, his office told Blockworks last month.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Gnosis is betting that openness — not ownership — will define the future of onchain money

article-image

Crypto’s quest to imbue shareholder protections for tokens

article-image

Grass previously raised a seed and Series A rounds and plans to utilize the token purchase to execute on its roadmap

article-image

Bain Capital Crypto and Haun Ventures co-led the round as demand grows for Bitcoin-denominated savings and annuities

by Blockworks /
article-image

NYSE owner’s investment values the prediction market at $8–9 billion, signaling Wall Street’s entry into event-based trading

by Blockworks /
article-image

Pineapple begins deploying its $100 million Injective Digital Asset Treasury, staking INJ to earn yield and fund onchain mortgage ambitions

by Blockworks /