U.S. Senators Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) wrote to the U.S. Justice Department on Nov. 23 to call to hold former FTX CEO Sam Bankman-Fried (SBF) “and any complicit FTX executives” to the fullest extent of the law.
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The senators wrote that FTX’s swift collapse created shockwaves across the industry, and the impact of the collapse on retail investors is even more alarming.
They said FTX created a false sense of safety and legitimacy, and encouraged investors to invest their hard-earned money with the exchange through costly advertisement placements and celebrity endorsements.
Warren is a member of the Senate Banking Committee, and Whitehouse sits on the Senate Judiciary Committee.
SBF attempted to downplay concerns over liquidity in the days leading up to the collapse, which became clear when customers unsuccessfully attempted to withdraw their deposits.
The senators added FTX’s collapse was not a result of sloppy business practices but appears to have been caused by intentional and fraudulent tactics employed by SBF and other executives to enrich themselves.
As the situation unfolds, new facts will shed light on how FTX’s customers were harmed and could reveal problems with the crypto industry that extend beyond FTX, the senators wrote.