Maxine Waters has no plans to subpoena Bankman-Fried for testimony

Rep. Maxine Waters (D-CA) attends a House Financial Services Committee hearing in Washington on Oct. 23, 2019.

Erin Scott | Reuters

House Financial Services Committee Chair Maxine Waters told Democrats she has no plans to subpoena former FTX CEO Sam Bankman-Fried to testify at Tuesday’s hearing about the crypto exchange’s rapid decline, according to people with direct knowledge of the conversation.

Waters briefed committee members on Tuesday at a private meeting with Securities and Exchange Commission Chairman Gary Gensler on Capitol Hill of her decision, saying those people declined to be identified to speak freely about private discussions.

Attendees at the meeting say Waters said she wanted committee staff to try to persuade Bankman-Fried to testify voluntarily, those with knowledge of the meeting said. Bankman-Fried has yet to agree to testify voluntarily before the House Committee until late Wednesday, two of the people said.

Waters, who will lose the chairmanship when Republicans take control of the House on Jan. 3, could end up deferring Rep. Patrick McHenry, RN.C., the panel’s top Republican and likely next chairman, to decide on whether to subpoena Bankman -Fried in the next session of Congress if the FTX founder declines to testify voluntarily next week.

Bankman-Fried has been under the scrutiny of federal investigators and lawmakers on Capitol Hill ever since its cryptocurrency exchange suddenly collapsed last month, exposing a multitude of questionable transactions. Senate Banking Committee Chairman Sherrod Brown, D-Ohio, announced that his committee would hold a hearing on Dec. 14 on the FTX implosion. The company’s collapse came after FTX reportedly transferred billions of dollars in customer funds to Bankman-Fried’s trading firm Alameda Research.

Waters invited Bankman-Fried to testify voluntarily before the panel and could change her mind at any time and subpoena him before Tuesday. A committee spokeswoman declined to comment. The committee and Waters tweeted in response to this story that a subpoena for Bankman-Fried is “definitely on the table. Stay tuned in.”

Bankman-Fried tweeted his response to Waters, saying he felt it was his “duty” to explain what happened, although it may not happen next week. John Jay Ray III, FTX’s new CEO, is scheduled to testify at next week’s House of Representatives hearing.

“Once I’m done studying and verifying what happened, I would feel it my duty to appear before the committee and explain it,” Bankman-Fried said. “I’m not sure if that will happen by the 13th. But when the time comes, I will testify.”

Bankman-Fried’s fall from grace was swift and unforgiving after spending years atop Capitol Hill as a crypto “darling.” He donated nearly $40 million to the 2022 midterm congressional election, much of which went to Democrats.

Nishad Singh, who became FTX’s chief engineer in 2019 after working at Bankman-Fried’s trading company Alameda Research, has donated more than $13 million to Democratic Party causes since the start of the 2020 presidential election.

Ryan Salame, the co-CEO of FTX Digital Markets, donated an additional $23 million, with most of his contributions benefiting Republicans.