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One month prior to the catastrophic collapse, prominent crypto investors accused FTX founder Sam Bankman-Fried of “quietly lobbying” regulators. For well over a year, the former billionaire offered various suggestions, in interviews and in policy papers, as to how D.C. officials might police the nascent industry.
Legislative influence runs in the family. His father, Joseph Bankman, is a leading tax law scholar at Stanford University while his mother, Stanford law professor Barbara Fried, had helped raise tens of millions for Democratic Party candidates.
Today, we see many top U.S. officials, including Treasury Secretary Janet Yellen and Securities and Exchange Commission (SEC) Chair Gary Gensler, pushing to strengthen crypto legislation to protect consumers.
Which government body ought to govern crypto was at the center of Bankman-Fried’s regulatory ideations.
“He thinks it’s very, very important that the Commodity Futures Trading Commission (CFTC) regulate his business,” wrote Bloomberg columnist Max Chafkin back in June. “In choosing the CFTC over the SEC, Bankman-Fried and others like him are picking the more pliable of the two agencies.”
In a Twitter post on March 28, the FTX founder signaled his approval for the CFTC assuming an “expanded role in policing cryptocurrency trading.” A month prior, Bankman-Fried hosted a private event for Washington insiders which, according to anonymous attendees, was intended to induce Congress to expand the powers of the commission.
Several former CFTC officials occupied top positions at FTX including board member Jill Sommers, a former commissioner of the regulatory body.
In response to the appointment, Center for Economic and Policy Research director Timi Iwayemi highlighted in September that “this move further illustrates FTX CEO Sam Bankman-Fried apparently insatiable desire to accumulate a cadre of revolving door pawns to influence crypto legislations and policy in Washington, D.
