Outgoing Top SEC Lawyer Dined With SBF During FTX Lobbying Spree
As SEC general counsel Berkovitz steps down, details of an upscale dinner reveal the relationship between FTX execs and top US officials
Maurice NORBERT/Shutterstock, modified by Blockworks
Securities and Exchange Commission (SEC) general counsel Dan Berkovitz reportedly dined with disgraced former FTX CEO Sam Bankman-Fried at an elite Indian restaurant in October last year.
Berkovitz is now set to leave the SEC at the end of next month, having worked there for a little over a year. He was a commissioner for the Commodities Futures Trading Commission (CFTC) at the time of the Bankman-Fried dinner, which occurred at Rasika West End in Washington DC on Oct. 5.
Bankman-Fried’s FTX US acquired CFTC-regulated crypto derivatives firm LedgerX three weeks later, rebranding the unit to FTX US Derivatives.
Other executives including FTX general counsel Ryne Miller and former FTX President Brett Harrison joined them, according to the Washington Examiner, citing emails retrieved by the watchdog Protect the Public’s Trust under the Freedom of Information Act.
LedgerX CEO Zach Dexter, Association for Digital Assets Markets CEO Michelle Bond and former CFTC Commissioner Mark Wetjen may have also attended, per the emails. Wetjen served as FTX head of policy and regulatory strategy.
It isn’t known what their dinner discussion involved. Still, it occurred during the heat of last year’s bull run, a time when FTX was pushing to offer margin trading and leverage to US-based crypto investors.
Miller paid the bill and Berkovitz reimbursed him $50 for his own meal, according to the report, with the amount at Miller’s request.
“Thanks, Ryne,” Berkovitz reportedly wrote to Miller in one of the emails. “I’m making the payment to PayPal now. Let me know if you don’t receive it. Here’s a copy of the article I gave to Sam. Enjoy!”
FTX’s Miller replied: “Received and thank you for the article. Wishing you all the best in the new adventure.”
FTX insiders now face SEC and CFTC fraud charges
The SEC hasn’t given any particular reason for Berkovitz’s stepping down, but Chairman Gary Gensler had good things to say about the official.
“I am grateful for [Berkovitz’s] exceptional public service and his dedication to this agency,” Gensler said in a statement. “[Berkovitz] has led the Office of General Counsel during a time in which we’ve proposed critical reforms throughout the capital markets. His counsel, judgment, and leadership have been invaluable to our work at the SEC.”
Berkovitz previously worked as general counsel under Gensler’s leadership at the CFTC between 2009 and 2013. He will be succeeded by Megan Barbero, principal deputy general counsel at the SEC. The SEC didn’t return Blockworks’ request for comment outside of regular working hours.
Berkovitz wasn’t the only CFTC official to have met with the FTX team. Bankman-Fried reportedly sat with CFTC Chairman Rostin Behnam and his team 10 times in the past 14 months, mostly in Washington.
Their meetings were largely focused on amending a clearinghouse license for LedgerX, according to Behnam’s testimony. In October, Bankman-Fried loudly backed a bill that would give the CFTC increased oversight of crypto spot markets.
The FTX co-founder was arrested in the Bahamas last week and extradited to the US late Wednesday evening, alongside by fraud charges laid by the CFTC and SEC.
He agreed to sign a $250 million bond backed by his parents’ California home, where he will be staying while awaiting trial.
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