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

article-image

Maurice NORBERT/Shutterstock, modified by Blockworks

share

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.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

hivemapper.jpeg

Research

We believe crypto market participants overlook Hivemapper’s fundamental potential due to a poor understanding of both the niche map data market and Hivemapper’s positioning relative to incumbents. Hivemapper’s token model catalyzes both a cost and product advantage via unmatched map freshness and near real-time accuracy, which is its wedge into a market characterized by stale data and high data collection costs. Its current and potential future product suite may represent one of the strongest possibilities for PMF in crypto today.

article-image

The Fidelity Ethereum Fund, like other proposed ETH ETFs, seeks to stake a portion of its assets, according to the firm’s Wednesday registration statement

article-image

The DAO first voted on enabling SAFE transfers over a year ago

article-image

The final Bitcoin halving, where the mining reward becomes smaller than one satoshi, is expected to occur in 2140

article-image

The Department of Justice and Commodity Futures Trading Commission announced back-to-back lawsuits against KuCoin Tuesday

article-image

Judge Failla found that Coinbase didn’t operate as an unregistered broker in offering its wallet service

article-image

A fund by Laser Digital offers investors exposure to the Polygon network, while a new 21Shares ETP focuses on staking rewards from Toncoin