US House Financial Services Committee Holds Hearing on FTX Collapse

Congressional Hearing with FTX CEO

The House Financial Services Committee of the United States Congress held a hearing on Tuesday, December 13, with John J. Ray III, CEO of FTX Group, as the key witness.

In the first major hearings in the United States Congress following the arrest of disgraced Co-Founder Sam Bankman-Fried (SBF), US Representatives asked questions for nearly four hours to open the Congressional record on the matter.

“This is going to be a law school exam for students for years to come,” said Congressman William Timmons, (R-SC-04).

Mr. Ray, a veteran of the infamous Enron fraud, has notably said: "never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

The overall mood of the hearing had been one of astonishment at the magnitude of the collapse and dismay to FTX’s corporate organization. The size is truly appalling, and the lack of oversight is unheard of. Many believe SBF will head to prison.

Many congressmen noted that what FTX committed was a fraud that is not unfamiliar to regulators, but it is instead the clean-up that will be uniquely difficult due to the nature of cryptocurrencies.

There was a strong underpinning of consumer protection from the committee as well. Many crypto skeptics felt this a good moment to repeat their dogmas.

Finally, Mr. Ray was put in a difficult spot, answering questions about many things he hasn’t had enough time to dissect fully or doesn’t seem to have complete access to yet.

Ray agrees with the overall mood of the hearing that the FTX fraud is unprecedented and will need incredible diligence to uncover what occurred.

Part two of the hearings is expected in 2023. To catch the full hearing, see below: