Emails Reportedly Show Former Regulators Helped SBF Get Into CFTC

Sam Bankman-Fried sitting in a car looks out the window.

Sam Bankman-Fried left a bail hearing on December 2. 22 on federal fraud charges for his role leading the failed crypto exchange FTX. Both the SEC and the CFTC have dropped new complaints against the crypto founder, although there are strong ties between the two agencies and former FTX executives.

While two of America’s top financial regulators along with the Department of Justice collectively decided to hammer the founder of failed crypto exchange FTX with allegations of massive fraud, there was a time – less of a year – where this same founder was the talk of the town of Washington. Crypto billionaire Sam Bankman-Fried once chatted with lawmakers and regulators, and new emails show how the 30-year-old former FTX CEO used former regulators to get closer to US agencies.

the Los Angeles Times reported on Monday that emails showed Ryne Miller, FTX’s general counsel, successfully used past contacts with former regulators to secure a table seat for Bankman-Fried with the Commodity Futures Commissioner. Trading Commission, Dan Berkovitz. The October 2021 meal took place at an upscale restaurant in Washington, D.C. This is according to emails the LA Times received via a Freedom of Information Act request.

you see, Miller had worked as legal counsel for Gary Gensler, who was chairman of the CFTC and is now chairman of the Securities and Exchange Commission, from 2012 to 2013. Miller then worked as an attorney for the New York-based law firm Sullivan & Cromwell before joining FTX in 2021. Miller reportedly paid Berkovitz $50 for his share of the dinner.

Also at the dinner was Mark Wetjen, a former CFTC chairman and commissioner who, at the time, worked as chief policy officer for FTX. Zach Dexter, the CEO of LedgerX, was also promised a seat at the table. LedgerX is an FTX affiliate that has been cited as one of the few solvent parts of the former Bankman-Fried crypto empire. Although after FTX and many of its affiliates declared bankruptcyLedgerX has since been upgraded up for sale.

The emails also show that Miller tried to get CFTC Commissioner Dawn Stump to come to the dinner, but reports could not confirm whether she actually attended. You won’t find her at the CFTC anymore since she now works as tips for crypto risk monitoring company Solidus Labs.

Gizmodo has entered the revolving door between US financial regulators and crypto companies, a door that turned so fast it was enough to make your head spin. You have former officials from the US Treasury Department, CFTC, SEC, and others like Binance, Coinbase, Astra Protocol, and other crypto-minded financiers like venture capital firm a16z.

Despite this alleged camaraderie between crypto players and those supposed to regulate the industry, the SEC and the CFTC filed a case. civil complaints against Sam Bankman-Fried. The two agencies alleged that the founder of FTX committed fraud by authorizing an “unlimited line of credit” between the crypto exchange and its sister hedge fund company Alameda Research. Although the crypto founder, who often uses his initials SBF, claimed that Alameda operated as a separate entity, regulators alleged that he still nominally controlled FTX and Alameda, and funneled users’ crypto to the hedge fund. .

Gizmodo contacted the CFTC for comment, but we did not immediately receive a response. Berkovitz, the guy who helped organize dinner with SBF and crypto regulators, is now general counsel for the SEC. We also reached out to the SEC to see if they had any comment on Berkovitz’s role with the current SEC complaints against Bankman-Fried, but the SEC declined to comment.

During recent hearing With the US Senate Agriculture Committee, current CFTC Chairman Rostin Behnam tried to explain why his agency is best suited to regulate the entire declining crypto industry, while fighting allegations that his agency mocked SBF’s FTX. He said his agency had met with FTX agents 10 times, although he further claimed that all of those meetings were about setting up a crypto clearinghouse. He further hailed LedgerX as so strong because it was regulated by the CFTC.

Some US government officials have been too eager to share a bed with the fledgling crypto industry, to the point now that when that same industry finally shows its uglier side, those regulators who were supposed to protect users and investors from crypto’s worst quirks the brothers are now forced to pretend they’ve always been tough on crypto while flexing their rather thin muscles. While that doesn’t do much for investors who have collectively lost billions of dollars this year alone from blatant crypto exchanges.