Sam Bankman-Fried may face subpoenas from U.S. Congress committees if he fails to voluntarily attend and testify at the two separate congressional hearings next week on the collapse of FTX.com and Alameda Research, the cryptocurrency exchange and its brokerage arm he founded.
Sherrod Brown, chair of the Senate Banking Committee, wrote in a letter to Bankman-Fried dated Wednesday, requesting the former FTX chief executive to testify in person, at a hearing on Dec. 14, before the Committee on Banking, Housing, and Urban Affairs in Washington, D.C.
If Bankman-Fried refuses, “I am prepared, along with Ranking Member Pat Toomey, to issue a subpoena to compel your testimony,” Brown said.
Bankman-Fried, who recently took part in a series of interviews from the Bahamas, is being pressured by Congress to testify and explain the rapid downfall of FTX, and its controversial relationship with trading firm Alameda Research. Alameda has allegedly used FTX customer deposits for trading.
The embattled founder could face more than 20 years in prison if he is convicted, according to at least two lawyers who recently spoke to Forkast.
“As the Founder and CEO of FTX Trading Ltd. at the time of its collapse and the founder, principal owner, and former CEO of Alameda Research, you must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors,” Brown said in the letter.
Brown requested Bankman-Fried to respond by 5:00 p.m. EST, Thursday.
Bankman-Fried tweeted earlier this week that he may not testify at a separate hearing on Dec. 13, in a response to House Financial Services Chair Maxine Waters’ invite for the disgraced founder to testify at the U.S. House Committee on Financial Services hearing on the FTX meltdown.
“Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” Bankman-Fried tweeted. “I’m not sure that will happen by the 13th. But when it does, I will testify.”
CNBC reported on Wednesday that Waters told a group of Democrats that she did not plan to subpoena Bankman-Fried to the hearing.
Waters, in response to the CNBC report, tweeted on Thursday that a subpoena is “definitely on the table. Stay tuned.”
Lies are circulating @CNBC that I am not willing to subpoena @SBF_FTX. He has been requested to testify at the December 13th hearing. A subpoena is definitely on the table. Stay tuned.— Maxine Waters (@RepMaxineWaters) December 8, 2022
Despite ongoing probes from U.S. authorities, Bankman-Fried still made public appearances last week to discuss the collapse of FTX. He said, at the time, that he was acting against his legal team’s advice by doing so.
He spoke to Vox last month and gave an interview to ABC News anchor George Stephanopoulos, who flew to the Bahamas, which aired on Good Morning America last week.
He told Stephanopoulos that he “did not know that there [was] any improper use of customer funds” at his company, responding to allegations that FTX client funds were siphoned off and used for trading by Alameda.
Also last week, Bankman-Fried spoke virtually from the Bahamas at the New York Times DealBook Summit in New York, saying he “didn’t knowingly commingle funds.” He has also joined a number of live panel discussions hosted publicly on Twitter last week.
While some lawyers have warned of the risks of public speaking and warned that Bankman-Fried could face decades in jail if convicted, Bankman-Fried told the DealBook conference that criminal liability is not his biggest concern.
Bankman-Fried has hired white-collar crime specialist Mark Cohen to represent him, a Bankman-Fried spokesperson told Forkast on Wednesday.