Senators Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) wrote a letter to the US Department of Justice expressing concern over the FTX implosion.
The senators want the DOJ to hold the executives of FTX “accountable
to the fullest extent of the law” for the allegations of fraud and illicit behavior that
led to the eventual collapse of the exchange that was valued at $32 billion a short while ago.
The senators noted the companies impacted by FTX — Genesis’ $175 million locked in FTX trading account; crypto hedge fund Galois Capital’s approximately $100 million locked in its FTX account; and BlockFi’s halting of withdrawals and planned bankruptcy filing.
Warren and Whitehouse stated that FTX wants to discharge its debts to customers — many of whom are retail investors — of up to $8 billion.
The letter states “FTX created a false sense of safety and legitimacy and encouraged consumers to pour their hard-earned money into investments on the exchange.”
The senators call out former CEO Sam Bankman-Fried for trying to minimize the concerns before the collapse, stating that it is clear he and company representatives “were lying.”
“The fall of FTX was not simply a result of sloppy business and management practices, but rather appears to have been caused by intentional and fraudulent tactics employed by Mr. BankmanFried and other FTX executives to enrich themselves,” the letter states.
The letter implores the DOJ to prosecute the individuals responsible for the harm brought on to the victims of the exchange’s collapse.
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