Emails purportedly show former regulators helped SBF file with CFTC

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Sam Bankman-Fried sitting in a car looking out the window.

Sam Bankman-Fried sitting in a car looking out the window.

Sam Bankman-Fried left a bail hearing on Dec. 22 as part of federal fraud charges for his role as head of bankrupt crypto exchange FTX. The SEC and CFTC dropped further complaints against the cryptocurrency founder, although there are strong connections between both agencies and former FTX executives.

While two of the biggest financial regulators in the US, along with the Department of Justice, have collectively decided to hammer the founder of bankrupt crypto exchange FTX with allegations of massive fraud, there was a time – less than a year ago – when the same founder was the talk about the city in Washington. Former crypto billionaire Sam Bankman-Fried has spoken with lawmakers and regulators, and new emails show how the 30-year-old former CEO of FTX used former regulatory officials as a means to reach out to US agencies.

The Los Angeles Times reported on Monday that emails showed that Ryne Miller, FTX’s general counsel, was able to use old contacts with former regulators to get Bankman-Fried a seat at the dinner table with the then commissioner of Commodity Futures. Trading Commission, Dan Berkovitz. The October 2021 meal took place at an upscale restaurant in Washington DC. This is according to emails the LA Times received via a Freedom of Information Act request.

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You see, Miller worked as a general counsel for Gary Gensler, who was chairman of the CFTC and is now chairman of the Securities and Exchange Commission, from 2012 to 2013. Miller then worked as an attorney at the law firm of Sullivan & Cromwell before joining FTX in 2021. Miller reportedly paid Berkovitz $50 for his share of the dinner.

Also at the dinner was Mark Wetjen, a former chairman and commissioner of the CFTC who, at the time, served as FTX’s chief policy officer. Zach Dexter, the CEO of LedgerX was also promised a seat at the table. LedgerX is an affiliate of FTX that has been cited as one of the few solvent parts of Bankman-Fried’s former crypto empire. Though after FTX and many of its affiliated companies declared bankruptcy, LedgerX was put up for sale.

The emails also show that Miller tried to convince then-CFTC Commissioner Dawn Stump to attend the dinner, but reports could not confirm that she actually attended. You won’t find her at the CFTC anymore, as she now works as a consultant for crypto risk monitoring firm Solidus Labs.

Gizmodo entered the revolving door between US financial regulators and cryptocurrency companies, a door that was turning so fast it was enough to make your head spin. You have former employees of the US Treasury Department, CFTC, SEC and others stepping into companies like Binance, Coinbase, Astra Protocol and other crypto financiers like venture capital firm a16z.

Despite this supposed friendship between crypto players and the people destined to regulate the industry, both the SEC and CFTC have filed civil complaints against Sam Bankman-Fried. Both agencies alleged that the FTX founder committed fraud by allowing an “unlimited line of credit” between the crypto exchange and its hedge fund sister company Alameda Research. Although the crypto founder, who often goes by his initials SBF, claimed that Alameda operated as a separate entity, regulators claimed he was still nominally in control of FTX and Alameda, and was funneling crypto from users to the hedge fund.

Gizmodo reached out to the CFTC for comment, but we didn’t immediately hear back. Berkovitz, the guy who helped organize the dinner with the SBF and cryptocurrency regulators, is now the SEC’s general counsel. We also reached out to the SEC to see if they had any comment on Berkovitz’s role with the SEC’s current complaints against Bankman-Fried, but the SEC declined to comment.

During a recent hearing with the U.S. Senate Committee on Agriculture, current CFTC Chairman Rostin Behnam attempted to make a case for why his agency was best able to regulate the entire cryptocurrency industry, while battling allegations that his agency was getting involved with SBF’s FTX. He said his agency met 10 times with FTX officials, though he claimed that all those meetings ended up creating a crypto clearinghouse. He further praised LedgerX as so solid because it was regulated by the CFTC.

Some US government officials are only too eager to share a bed with the nascent crypto industry, to the point now that when that same industry finally shows its uglier side, the regulators who are supposed to protect users and investors from cryptocurrency’s worst whims Bros are now forced to pretend they’ve always been hard on cryptocurrencies while exercising their rather lean muscles. Though that does little for investors who have collectively lost billions of dollars this year alone on blatant cryptocurrency exchanges.

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