With or Without Sam Bankman-Fried, Crypto Testimony Is Fraught

With Bankman-Fried now under arrest, will that make Congressional testimony better or worse for the crypto industry?

House Financial Services Committee Examines Digital Assets
Sam Bankman-Fried will testify virtually from his home in the Bahamas. Alex Wong/Getty Images

Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, was scheduled to testify before Congress this week, along with law professors, investors and crypto commentators over the sudden collapse of his company once valued at $32 billion. While Bankman-Fried seems an obvious choice, some crypto industry insiders are questioning the selection of other witnesses and whether they have the expertise to discuss FTX. His arrest on Monday evening makes it unlikely he will testify.

Both chambers of Congress have public hearings scheduled for Dec. 13 and Dec. 14. Bankman-Fried will virtually testify on Dec. 13 before the U.S. House of Representatives Committee on Financial Services in a hearing entitled “Investigating the Collapse of FTX, Part I.” John Ray III, a turnaround executive who took over as the CEO of FTX Group following its bankruptcy filing in November, will also testify.

Bankman-Fried currently lives in a penthouse in the Bahamas, where FTX Group is registered.

On Dec. 14, the Senate Committee on Banking, Housing and Urban Affairs will conduct a hearing entitled “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers.” The Senate committee’s website has listed four witnesses so far:

  • Hilary Allen, a professor teaching financial regulation at the American University and a crypto skeptic;
  • Kevin O’Leary, a crypto investor and a brand ambassador for FTX. O’Leary told CNBC in an interview last week he had lost $15 million from investing in FTX;
  • Jennifer Schulp, the director of financial regulation studies at Cato Institute, a conservative think tank;
  • Ben McKenzie Schenkkan, an actor-turned-commentator and a vocal crypto critic. He is best known for playing the television role as Ryan Atwood on the teen drama The O.C.

Critics doubt these witnesses will have answers to Senate lawmakers’ questions. “Next time the Congress wants to hold a hearing on crypto they might try inviting people who know what they’re talking about,” tweeted Preston Byrne, a lawyer and CoinDesk columnist, today (Dec. 12).

The Senate FTX hearing will be “a complete goat rodeo and mockery of the system,” Ryan Selkis, the founder of crypto research firm Messari, tweeted on Dec. 8. “I offered to go even though it would have been a distraction, but instead the Senate opted for the former child star of the OC and a ‘never crypto’ academic,” referring to Allen.

Bankman-Fried was invited to testify at both hearings. But he said he’s attending only one virtually because he is “quite overbooked” and has securities concerns about traveling from the Bahamas.

“I still do not have access to much of my data—professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like,” Bankman-Fried tweeted in response to Maxine Waters, the chairwoman of the House Committee on Financial Services, on Dec. 9.

This article has been updated to reflect Bankman-Fried’s arrest. 

With or Without Sam Bankman-Fried, Crypto Testimony Is Fraught