Tweet It to Believe It: SBF Speaking at House Hearing

The one-time billionaire founder of failed Crypto exchange FTX, Sam Bankman-Fried, is heading to Washington.

This, as the fallen king of crypto tweeted to Congresswoman and House Financial Services Committee (HFSC) Chair Maxine Waters — with his replies off — that “As the committee still thinks it would be useful, I am willing to testify on the 13th.”

1) I still do not have access to much of my data — professional or personal. So there is a limit to what I will be able to say, and I won't be as helpful as I'd like.

But as the committee still thinks it would be useful, I am willing to testify on the 13th. https://t.co/KR34BsNaG1

— SBF (@SBF_FTX) December 9, 2022

That committee, of course, is led by Waters, the House Financial Services Committee. The hearing, “Investigating the Collapse of FTX, Part I,” is meant to help unpack the implosion of the cryptocurrency exchange SBF founded and ran, FTX.  

Witnesses invited to appear before Congressional committees traditionally make themselves available voluntarily. The change of heart comes less than a week after SBF was “not sure” whether he would testify, again via Twitter, saying he needed time to “finish learning and reviewing what happened.”

While now willing to testify, it is presumed that he will appear virtually as his precise whereabouts remains unknown.

$8 Billion

Likely lines of questioning will surround the $8 billion in customer deposits SBF says he “misaccounted” for, which his exchange comingled and then inexplicably lost. 

One certain thing is that FTX users face a long road ahead in their efforts to get any of their money back. 

“As you know, the collapse of FTX has harmed over one million people,” Waters tweeted last week (Dec. 5). “Your testimony would not only be meaningful to members of Congress, but is also critical to the American people.” 

Although Waters will lose her committee chairmanship next year when Republicans take control of the House on Jan. 3, the hearing on Dec. 13 will likely be a bipartisan effort undertaken with North Carolina Congressman Patrick McHenry, the panel’s top Republican member. 

As if his public appearance weren’t enough of a draw, SBF tweeted an outline of sorts to the committee chair. 

“I will try to be helpful during the hearing, and to shed what light I can on:

–FTX US’s solvency and American customers

–Pathways that could return value to users internationally

–What I think led to the crash

–My own failings” 

For the many observers of this case, all the back-and-forth tweeting on social media has only underscored how strange the FTX situation is. 

The Hype and Hearings

Current caretaker CEO at FTX, John Jay Ray III, is also scheduled to testify at the House hearing, where he is the only witness listed so far on the hearing’s official site.

The Senate Banking Committee will hold its own FTX hearing the day after the House panel’s session, on Dec. 14.  

Ahead of that, Committee Chair and Ohio Democratic Senator Sherrod Brown released a public letter requesting SBF’s appearance. 

“If you chose not to appear, I am prepared, along with Ranking Member Pat Toomey, to issue a subpoena to compel your testimony,” Brown’s letter reads. If they do, in fact, issue a subpoena, the Senate Banking Committee will be the first government office to compel SBF to appear. 

As of now, SBF has missed the deadline to confirm his appearance.

Other confirmed witnesses for the Senate hearing include academic Hilary J. Allen, and the actor Ben McKenzie, both outspoken critics of crypto. 

“I worry that the financial inclusion narrative is being used as sort of a screen to hide what we call predatory inclusion,” Allen has said. “I mean, the first thing I would like to see is sort of a blanket ban on any banks or any other sort of institutional players getting into the crypto space. I think that’s critical.”

McKenzie, who is best known as the teen heartthrob Ryan Atwood on the O.C., has taken to writing and is set to publish a book entitled “Easy Money” next year.

The hearing page mentions additional witnesses may be added at a later date, and FTX investor and spokesperson Kevin O’Leary has also indicated he may attend to provide some “balance.” 

The Shark Tank investor, who “lost millions” on FTX, last month said on Twitter that he believed SBF’s explanation about FTX’s collapse being an “embarrassing mistake.” O’Leary has said during a past public appearance that, “If there’s ever a place I could be that I’m not going to get in trouble it’s going to be at FTX.” 

“Finally solved my #compliance concerns with #cryptoassets I’m increasing my allocation on the #FTX platform,” he posted a year ago on his LinkedIn page while announcing his partnership with the exchange. 

O’Leary has not replied to a request for comment from PYMNTS. 

Other Developments

Testimony or not, the floundering FTX founder has apparently been caught on tape admitting that his exchange commingled funds in what would amount to a clear violation of the company’s Terms of Service. 

As reported by the New York Times, U.S. federal prosecutors in Manhattan are investigating whether SBF and FTX illegally manipulated the crypto market.

Separately, it has been reported by the Stanford Daily that neither of SBF’s parents, both professors at Stanford’s top-ranked law program, will be teaching classes at the school next quarter. 

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.