FTX founder Sam Bankman-Fried misses deadline to respond to key US Senate committee

Mr Bankman-Fried has denied trying to perpetrate a fraud while admitting to grievous managerial errors at FTX. PHOTO: NYTIMES

SINGAPORE - FTX founder and former chief executive Sam Bankman-Fried missed the deadline set by a United States Senate committee for a response to a request to testify at a Dec 14 hearing on the cryptocurrency exchange’s collapse into bankruptcy.

Mr Bankman-Fried’s counsel didn’t reply in the stated time-frame, the Senate Committee on Banking, Housing, and Urban Affairs said in a statement.

“We believe it’s important that Bankman-Fried show he is willing to provide transparency and accountability to the American people by providing testimony,” committee chairman Sherrod Brown and Ranking Member Pat Toomey said in the statement. “We will continue to work on having him appear before Congress as detailed in Wednesday’s letter.”

In that letter Senator Brown wrote that he and Senator Toomey are prepared to issue a subpoena if Mr Bankman-Fried doesn’t choose to appear voluntarily. The disgraced former crypto mogul faces a slew of investigations and class-action lawsuits aimed at him or the companies in his defunct empire.

Mr Bankman-Fried, who hasn’t been charged with any crimes, has denied trying to perpetrate a fraud while admitting to grievous managerial errors at FTX.

Mr Bankman-Fried has retained New York defense attorney Mark Cohen to represent him. Mr Cohen was previously part of the team that represented convicted sex trafficker Ghislaine Maxwell.

Mr Bankman-Fried has also been asked to testify before the House Financial Services Committee, with chairman Maxine Waters saying Wednesday that it’s “imperative” that he attend a Dec 13 hearing.

FTX’s new chief executive officer John J. Ray III, the restructuring expert who took over the firm in bankruptcy, will testify at the House panel. He’s painted a picture of FTX as a mismanaged, largely out-of-control company bathed in conflicts and lacking basic accounting practices, calling it the worst failure of corporate controls he’d ever seen.

FTX imploded with an US$8 billion (S$10.8 billion) hole in its balance sheet and there are many questions about whether it mishandled customer funds. It owes its 50 biggest unsecured creditors a total of US$3.1 billion and there may be more than a million creditors globally. BLOOMBERG

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