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Sam Bankman-Fried’s Links with CFTC Boss Rostin Behnam Show Concerning Links Between Regulator and Disgraced Crypto Boss

Last Updated April 16, 2024 9:30 AM
Teuta Franjkovic
Last Updated April 16, 2024 9:30 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Renewed inquiry into CFTC and Bankman-Fried interactions.
  • Calls for expanded CFTC authority.
  • Comprehensive oversight and accountability demands.

United States Senators Elizabeth Warren and Charles Grassley have officially requested information from Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam concerning his prior interactions with Sam Bankman-Fried, the former CEO of the now-defunct cryptocurrency exchange FTX.

The senators are seeking detailed  accounting and have decided to “renew requests” for this information. This move comes after Bankman-Fried was jailed for 25 years on fraud charges.

Senators Warren and Grassley Probe CFTC’s Meetings with Bankman-Fried

This move highlights the ongoing scrutiny into the relationships between regulators and industry figures following FTX’s collapse.

Senators Warren and Grassley, representing different political parties. They have, however highlighted Behnam’s previous acknowledgment of frequent meetings  with Bankman-Fried. During a Senate Agriculture Committee hearing in December, Behnam admitted: 

“My team and I met with Mr. Bankman-Fried and his team […] over the past 14 months, we met 10 times in the CFTC office at their request.”

This revelation forms part of the senators’ attempt to scrutinize interactions between regulators and the disgraced former billionaire.

CFTC Chair Seeks Expanded Authority Amid Regulatory Gaps

During a recent hearing where he was the sole witness, Behnam highlighted the limitations of the current federal regulatory framework for cryptocurrencies. Behnam emphasized the need for enhanced CFTC authority, stating ,

“Without new authority for the CFTC, there will remain gaps in a federal regulatory framework, even if other regulators act within their existing authority.”

In a letter dated April 12, Warren and Grassley, called attention to the ongoing discussions about cryptocurrency regulation.

“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.”

Demanding Full Disclosure of CFTC Interactions with FTX

CFTC Chair Rostin Behnam noted that LedgerX, an FTX-owned entity regulated by the CFTC, was unaffected by the FTX collapse and continued its operations. In light of this, Senators Elizabeth Warren and Charles Grassley are intensifying their scrutiny.

They have requested detailed records of all interactions between Behnam or other CFTC staff and Sam Bankman-Fried, FTX, Alameda Research, or their associated executives.

Furthermore, the senators are seeking a comprehensive timeline detailing the CFTC’s awareness of the alleged fraud. This includes descriptions of any proposed or ongoing investigations into these parties.

Senators Probe Depth of CFTC’s Prior Interactions with SBF

Senators Elizabeth Warren and Charles Grassley have expressed a strong desire to delve into the specifics of CFTC Chair Rostin Behnam’s numerous interactions with Sam Bankman-Fried before the public was aware of his crimes.

This inquiry is part of a broader effort to understand the nature and extent of regulatory engagement with Bankman-Fried and his enterprises. Additionally, Republican Senator Josh Hawley had previously contacted  Behnam, along with Attorney General Merrick Garland and SEC Chairman Gary Gensler, in November. Hawley asked whether their respective agencies had initiated investigations into FTX or Alameda Research prior to their collapses, or if they had reached any confidential settlements with these entities or their leaders.

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