Tom Emmer, the recently re-elected Republican lawmaker representing Minnesota’s 6th district in the United States House of Representatives, has alleged Securities and Exchange Commission chair Gary Gensler had been helping FTX CEO Sam Bankman-Fried to gain a “regulatory monopoly” through the crypto firm.
In a Nov. 10 tweet, Emmer criticized Gensler for “run[ning] to the media” amid FTX’s liquidity issues causing ripples throughout the crypto market. According to the Republican lawmaker, his team was looking into the SEC chair’s alleged collaboration with Bankman-Fried and FTX, but only cited reports presented to his office as evidence without providing details.
Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We’re looking into this. https://t.co/SznowgcP6V
— Tom Emmer (@RepTomEmmer) November 10, 2022
Gensler spoke on CNBC’s Squawk Box shortly before Emmer’s statement, not disputing records that SBF met with SEC officials on March 29. The SEC chair said many similar meetings led to the same message to crypto industry leaders — “non-compliance is not gonna work” — but did not confirm reports that the regulatory body was investigating the FTX US exchange.
“When you mix together a bunch of customer money, non-disclosure, and leverage, borrowing against it — and inside these companies trading — investors get hurt,” said Gensler, also citing the collapse of Terra. “This is a very interconnected world in crypto with a few concentrated players at the middle […] When markets turned on them it appears that a lot of customers lost money.”
Bankman-Fried is no stranger to Capitol Hill, having testified in December 2021 before the House Committee on Financial Services on the challenges crypto firms faced with regards to regulatory clarity. Committee chair Maxine Waters issued a statement on Nov. 10 pushing for federal oversight of crypto trading platforms and consumer protection amid FTX facing liquidity issues, but did not suggest the sort of coordination between the exchange and SEC that Emmer claimed.
The ongoing saga with FTX and SBF has resulted in extreme volatility across the crypto market and uneasiness from many users looking for the status of their funds. Bankman-Fried issued a public apology via Twitter on Nov. 10, claiming responsibility for not providing enough transparency during FTX’s “liquidity crunch.”