Two U.S. senators want to dig into the nature of one regulator’s interactions with FTX founder Sam Bankman-Fried, who was convicted on fraud and conspiracy charges last November.
Rostin Behnam, chair of the Commodity Futures Trading Commission, met with Bankman-Fried and his team 10 times in the 14 months preceding FTX’s bankruptcy.
Sens. Elizabeth Warren, D-MA and Chuck Grassley, R-IA, are calling upon Behnam to fully disclose details of all meetings, phone calls and written correspondence between the CFTC and Bankman-Fried or his staff. The lawmakers also want disclosed all conversations by Behnam or any CFTC employee about Bankman-Fried or any associated executives or companies; and a timeline of the regulator’s knowledge of Bankman-Fried’s crimes.
“Mr. Bankman-Fried was sentenced last month to 25 years in prison for stealing $8 billion dollars from users of the cryptocurrency exchange FTX. This punishment, while appropriate, provided cold comfort for his victims, who will never be made whole financially,” Warren and Grassley wrote. “Safeguarding the savings and retirements of Americans requires Congress and market regulators like the CFTC to determine how this multi-billion-dollar crime was allowed to happen.”
Prior to FTX’s November 2022 bankruptcy and Bankman-Fried’s criminal trial thereafter, Bankman-Fried and Behnam appeared to have forged an alliance. Bankman-Fried was a vocal proponent the Digital Commodities Consumer Protection Act, a bill that would have put the CFTC – rather than the Securities and Exchange Commission – in the driver’s seat on crypto regulation. The bill was co-sponsored by Behnam’s former colleague Sen. Debbie Stabenow, D-MI.
“It’s a well-done bill,” Bankman-Fried said of the bill in an October 2022 interview with the Washington Post. “And it’s well-positioned.”
Behnam had been vocal earlier that year about his belief that the CFTC should become crypto’s primary regulator.
In 2021, Bankman-Fried had proposed a revamp of commodities trading regulations overall, according to the Washington Post. While other federal regulators questioned the idea, CFTC officials worked with FTX for months as it developed a proposal. Behnam spoke positively of the idea publicly, according to the Washington Post.
During a congressional hearing that followed FTX’s fallout, Behnam said the commodities trading revamp proposal was the reason behind many of his meetings with Bankman-Fried.
“We did not have flexibility to put it on the side of the desk or disregard it…knowing the importance of the issue and the very strong feelings on both sides,” Behnam told Congress, according to Time.
Warren and Grassley are giving Behnam until April 29 to provide the information they’ve requested.
The CFTC did not return a request for comment by press time.
