Sam Bankman-Fried, the founder of the collapsed FTX, missed a deadline set by a US Senate committee for responding to testify for a December 14th hearing. The hearing is related to the collapse of cryptocurrency exchange FTX and its progression into bankruptcy, as reported by Bloomberg News.
Counsel of Bankman Fried failed to respond within the time frame assigned by the Senate Committee on Banking, Housing, and Urban Affairs, as revealed in a statement. As stated by Chairman Sherrod Brown and Ranking Member Pat Toomey, they believe that Bankman Fried must show his willingness to be transparent and accountable to the people of America by providing testimony.
In a letter, Senator Brown has written that Senator Toomey and he are ready to issue a subpoena provided Bankman Fried refuses to appear voluntarily. A slew of investigations awaits the collapsed cryptocurrency exchange founder aside from class action lawsuits or companies he was related with.
However, Bankman Fried does not have any criminal offenses against him. Bloomberg News reports that he is in denial mode about trying to perpetuate fraudulent activities while succumbing to grievous errors in managerial operations at the FTX. Bankman Fried and his Mark Botnick were not available for comment immediately on the statement recently released by the Senate banking panel.
There was confirmation on Tuesday from Botnick that Sam Bankman Fried has retained Mark Cohen, NewYork’s defense attorney, to represent him. Cohen earlier represented Ghislaine Maxwell, the convicted sex trafficker, and also represented analyst Peter Black when the Securities and Exchange Commission lawsuit in a trial in 2014 charged him.
The House Financial Services Committee has also asked Bankman Fried to testify with Maxine Waters, the Chairwoman stating Wednesday that it is imperative for a December 13th hearing.
Bloomberg News reports that the FTX’s new Chief Executive Officer, John J. Ray III, often known as the “restructuring expert” responsible for taking over the company that is in bankruptcy, is supposed to testify at the House Panel.
According to him, a mismanaged company that is out of control, soaked up in disputes and conflicts, and devoid of the fundamentals of accounting practices is what he paints the picture of FTX as. He has also said that this collapse is the worst of the corporate control failures he has seen so far.
FTX was found to have an $8 billion hole in the balance sheet, and several questions have been raised related to funding misappropriation and mishandling of customer funds. The biggest unsecured creditors that FTX owes an amount to $3.1 billion. The chances of a few more million creditors across the globe are not unusual.
