Congressman Brad Sherman Statement on Collapse of FTX

Washington, D.C. – Today, Congressman Brad Sherman (D-Sherman Oaks), Chairman of the Subcommittee on Investor Protection and Capital Markets, released the following statement regarding the collapse of FTX.

“The sudden collapse this week of one of the largest cryptocurrency firms in the world has been a dramatic demonstration of both the inherent risks of digital assets and the critical weaknesses in the industry that has grown up around them. While it is now evident that the failure of FTX represents tens of billions of dollars in losses, we do not yet know the scope of financial harm caused to consumers and investors in the U.S. and around the world. It is crucial that we develop a clear understanding of the chain of events and management failures that led to this collapse. I fully support the efforts of U.S. regulators and law enforcement to investigate this situation and make sure those responsible are held accountable.

“For years I have advocated for Congress and federal regulators to take an aggressive approach in confronting the many threats to our society posed by cryptocurrencies. When SEC Division of Enforcement Director Gurbir Grewal testified before my Investor Protection Subcommittee earlier this year, I called on him to pursue enforcement actions against the largest cryptocurrency exchanges for failing to register with the SEC after listing tokens on their platforms that the Commission had publicly identified as unregistered securities. I believe it is important now more than ever that the SEC take decisive action to put an end to the regulatory gray area in which the crypto industry has operated.

“In the coming weeks I also plan to work with my colleagues in Congress to examine options for federal legislation. To date, efforts by billionaire crypto bros to deter meaningful legislation by flooding Washington with millions of dollars in campaign contributions and lobbying spending have been effective. A great deal of attention has been given to former FTX CEO, Sam Bankman-Fried’s, political donations to Democrats; most of that was spent in primaries (mostly unsuccessfully), not to help Democrats beat Republicans. However, we have also seen Ryan Salame, the co-CEO of Bahamas based FTX Digital Markets, donate over $23 million to Republican candidates and campaign groups in 2022. When you examine FTX efforts to influence Washington, you have to look at both CEOs, not just the eccentric guy wearing the shorts.”

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