Rep. Bill Huizenga: FTX Collapse a Combination of Bad Business Decisions, Fraud, and Possible Money Laundering
The crash of the crypto trading company, FTX, sent shockwaves throughout the digital exchange world. Billions are missing, and companies with ties to FTX, like BlockFi, Genesis, Coinbase, and others, are filing for bankruptcy or struggling to survive.
In response to the crypto debacle, the U.S. House Financial Services Committee announced its plan to investigate FTX. And while its start date isn’t until Dec. 13, there are already reports that FTX founder and CEO Sam Bankman-Fried—or SBF, as he’s known—may be playing fast and loose with the facts.
In an interview that aired on Newsmakers by NTD and The Epoch Times on Dec. 7, Ranking Member of the Investor Protection, Entrepreneurship, and Capital Markets Subcommittee, Rep. Bill Huizenga (R-Mich.), stated that despite claiming on Twitter that he planned to attend upcoming Finance Committee hearings, SBF is not scheduled to attend the upcoming meeting.
“We have a hearing that is Dec. 13,” Huizenga said, raising his eyebrows. “It is my understanding that [SBF] is NOT going to be there. If that changes, great!”
“At the end of the day, this looks like it was the worst business practices of Enron and the Bernie Madoff situation, and they got together—and the product was Sam Bankman-Fried. It’s got all the hallmarks of both bad business decisions as well as fraud,” he stated.
SBF and FTX Investigation
According to Huizenga, there’s a lot that SBF needs to answer, and one of the questions he’d like to ask is what SBF was doing behind the scenes.
“I want to ask, specifically, what was the work being done behind the scenes with the Securities and Exchange Commission (SEC), for example. I want to know what those conversations were,” Huizenga said.
“[SBF] was seemingly, and looking like, he was trying to cut a deal, and create a sort of regulatory environment that would be beneficial to him, not necessarily to the technology or to the rest of the crypto world.”
Huizenga added that the SEC question is at the top of the fraud questions he wants to ask.
When asked what went wrong with FTX and the billions in missing funds, Huizenga replied, “Well! Let’s start with no board of directors! No accountability! No accounting standards! Clearly comingling of funds! There’s a myriad of things.”
But setting the concerning business practices aside, Huizenga underscored, “You have to ask yourself, the comingling [of funds]. The looking like the Ponzi scheme of Bernie Madoff. [FTX] just has all those hallmarks. And so, was this just outright fraud from Sam Bankman-Fried? I can’t come up with an answer other than ‘Yes’ at this point.”
Of further note, Huizenga alleged, is the question of whether FTX was a money laundering scheme for political donations.
Taking direct aim at current Finance Committee Chairwoman, Rep. Maxine Waters (D-Calif.) and a Twitter post she sent out praising SBF’s “candid” answers, Huizenga said, “There’s stories and rumors about [Waters] spending time down in the Bahamas with [SBF]. And, you know, with the Bahamian authorities. … There’s a lot of questions that have not been answered, that need to be asked.”
As for the political donations and possible money laundering, Huizenga said, “Clearly, [SBF’s] lean was to the left, and the hard left, and who he bankrolled. So, that, you know, $38 million dollars [in donations] was the second [largest donation amount] behind George Soros in total dollars that went to the Democrat party in this last election.”
Luckily, Huizenga quantified, while Waters is currently chair of the Finance Committee, and her impartiality may be in question, Republicans gained control of the House after the midterm elections. As such, Waters is losing her position to a Republican on Jan. 3.
“Republicans are going to be in control, and … [Rep.] Patrick McHenry [of North Carolina], who is our Ranking Member now, this evening was named chair, so he is going to be controlling [the investigation],” Huizenga said.
Huizenga also said he’s part of the leadership team overseeing the investigation and stated unequivocally, “We’re not going to let Maxine Waters, or anybody else, get in the way of asking these questions and getting answers.”
FTX Collapse
SBF founded FTX in 2019. Before its collapse, FTX was one of the largest cryptocurrency exchanges in the world.
At its peak, FTX was valued at $32 billion, while SBF’s net worth peaked at an estimated $26 billion. SBF was the second-largest individual donor to President Joe Biden in the 2020 election and donated almost $40 million during the 2022 election.
It’s believed that most of SBF’s political donations went to Democrats, but SBF has claimed he donated to Republicans equally. In contrast to his claim, data from OpenSecrets reports 99.6 percent of SBF’s donations went to “Liberals,” while 0.4 percent went to “Conservatives.”
Still, data from OpenSecrets shows the company FTX donated equally to Republicans and Democrats.
On Twitter, SBF has admitted to being overconfident and careless but also stated he’s committed to “do right by customers.” He further claimed that the FTX collapse and how it unraveled was a shock to him as well.
SBF did not respond to The Epoch Times’ request for comment by the time of publication.
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Katie covers energy and politics for The Epoch Times. Before starting her career as a journalist, Katie proudly served in the Air Force as an Airborne Operations Technician on JSTARS. She obtained her degree in Analytic Philosophy and a minor in Cognitive Studies from the University of Colorado. Katie’s writing has appeared on CNSNews.com, The Maverick Observer, The Motley Fool, First Quarter Finance, The Cheat Sheet, and Investing.com. Email her at [email protected]
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