New York

A powerful House of Representatives subcommittee is seeking internal documents and communications from Sam Bankman-Fried and FTX to understand how the crypto exchange collapsed so suddenly and what is being done to recover customer funds.

FTX, formerly one of the most trusted brands in crypto, filed for bankruptcy last week and announced the resignation of Bankman-Fried, its 30-year-old CEO who lost a fortune.

In a letter on Friday, Democratic Representative Raja Krishnamoorthi, chairman of the Oversight Committee’s subcommittee on economic and consumer policy, said he was “extremely disturbed” by the Bankruptcy of FTX and the “potentially significant damage” it will cause cause to American consumers and investors.

Krishnamoorthi asks for details on the liquidity crunch facing FTX, the sudden decision to declare bankruptcy, and what the company plans to do to “ensure that every dollar goes back to the American consumers who have placed their trust in your company”.

The subcommittee, which had already launched an investigation into the crypto industry in August, requested information and documents by December 1, including all internal documents and communications since 2021 related to liquidity issues. of FTX, balance sheet, customer funds, cryptocurrency holdings, money owed to customers, and management of customer funds.

“FTX investors and the American people demand answers,” Krishnamoorthi said.

Neither FTX nor an attorney representing Bankman-Fried responded to a request for comment.

The letter cited revelations from new FTX CEO John J. Ray, who in court filings this week described a “complete failure” by the crypto company to maintain financial controls. Ray said FTX’s failures dwarf even that of Enron, the infamous company whose liquidation he oversaw in the early 2000s.

Krishnamoorthi said he was “distressed” by comments Bankman-Fried has made since the FTX bankruptcy, including an interview with Vox this week where the former FTX boss said he ‘didn’t want to ‘do sketchy stuff’ but that ‘every individual decision seemed fine and I didn’t realize how big their sum was until at the end”.

Bankman-Fried was a face of the crypto industry and became a white knight for struggling businesses. He was too a leading campaign contributor to Democrats in the 2022 election cycle.

Earlier this week, Democratic senses Elizabeth Warren and Dick Durbin demanded that FTX and Bankman-Fried hand over a trove of documents that will shed light on the collapse, including balance sheets and details of bailouts given to others. crypto companies.