House committee weighing subpoena for Sam Bankman-Fried

Quick Take

  • Senior members for the House Financial Services Committee are weighing whether to subpoena former FTX CEO Sam Bankman-Fried. 
  • The House panel will hold a hearing on the FTX collapse and the state of the digital asset industry next week. 
  • Securities and Exchange Commission Chair Gary Gensler, a frequent critic and top regulator of the crypto industry, briefed Democrats on the committee in preparation for the hearing, but did not say whether he would testify on the matter next week.   

Senior members of the House Financial Services Committee are weighing a subpoena to compel embattled former FTX CEO Sam Bankman-Fried to testify, though little time remains to enforce one during this Congress.

In the meantime, members of the House Financial Services Committee want to hear from FTX’s other executives: Current CEO John Ray III, Ryan Salame, co-CEO of FTX Digital Markets, the Bahamian operations of the global corporate family, and others.

 “We’ve asked all of the principals that we could get from FTX, certainly,” committee Chair Maxine Waters, D-Calif., told The Block, without naming which executives the committee had contacted.

A subpoena issued now would be moot once a new Congress is seated in January, unless Republicans — who will take control of the committee — agree to one. When asked if she had reached an agreement with Rep. Patrick McHenry, R-N.C., the committee’s top Republican and chair-in-waiting for the committee, on a subpoena for Bankman-Fried, Waters said, “We have not gotten to that point yet, but I think it’s plausible.”

Another senior Democrat on the committee, Rep. Stephen Lynch of Massachusetts, told The Block that the committee is considering the maneuver the maneuver to compel Bankman-Fried to testify during the next Congress if he did not appear before the current one ends. 

A spokesperson for McHenry did not immediately provide comment on the possibility.

The means to enforce congressional subpoenas for nongovernmental figures are limited. Technically the House Sergeant-at-Arms, who helps oversee the U.S. Capitol Police, can arrest individuals who do not comply with congressional subpoenas for contempt of Congress. But such subpoenas can be tied up in legal wrangling, and contempt charges are typically referred to the Justice Department – which has already begun an investigation into FTX over dealings leading up to the collapse – for enforcement.

Democrats on the committee held a briefing on FTX with Securities and Exchange Commission Chair Gary Gensler that stretched for over two hours on Tuesday night. Committee Republicans named him as a witness they would like to hear speak publicly.

“We ought to have the SEC in. Gary Gensler hasn’t been here for over a year – it was a year ago in October,” said Bill Huizenga, R-Mich., the lead Republican on the Capital Markets Subcommittee.

Rep. Blaine Leutkemeyer, R-Mo., agreed. “Why was the SEC asleep at the wheel during all this?” 

While leaving his meeting with committee Democrats, Gensler declined to comment on whether he would testify next week. At least one senior Democrat on the committee, Rep. Jim Himes of Connecticut, worried how successful the panel would be in obtaining testimony from former FTX executives for the much-anticipated hearing next week.

“I’m worried that there’s going to be a lot less than meets the eye. You had behavior that in this country would be criminal,” Himes said. “It would shock me if lawyers would allow any of them to turn up without some sort of immunity agreement but it would be nice to hear from them as well.”


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