Sam Bankman-Fried scored meeting with top regulator, tried to win influence before collapse: Emails

Disgraced ex-cryptocurrency kingpin Sam Bankman Fried and his since-bankrupt company FTX scored a meeting with a top regulator and sought to sway them to adopt industry-friendly rules months before the exchange’s historic collapse, emails show.

In May 2022, FTX pitched the Federal Deposit Insurance Corporation on why it was apparently poised to be a “superior” cryptocurrency exchange and was swiftly granted a meeting with its chairman, Martin Gruenberg, according to emails obtained by watchdog group Protect the Public’s Trust and shared with the Washington Examiner.

FTX was on a lobbying spree to gain influence in Washington before its November 2022 collapse, which was due to it allegedly diverting customer funds to Alameda Research, a defunct-company Bankman-Fried co-founded.

On May 28, 2022, FTX’s-then policy head Mark Wetjen emailed Gruenber and discussed FTX’s “risk model,” which pertained to its application pending before the Commodity Futures Trading Commission (CFTC) to amend regulations that would pave the way for more federally authorized cryptocurrency product offerings. Wetjen requested a meeting with Gruenberg and Bankman-Fried.

“While the banking system has so far been relatively unscathed by the latest crypto crash, FTX’s collapse shows that crypto may be more integrated into the banking system than regulators are aware,” wrote Sens. Elizabeth Warren (D-MA) and Tina Smith (D-MN) in their letter — which asked whether agencies will investigate the relationships between banks and cryptocurrency firms.

The revelation of the meeting between FTX and Gruenberg comes after the Washington Examiner first reported on how Bankman-Fried and his then-FTX colleagues lobbied then-CFTC commissioner Dan Berkovitz for favorable regulations. Bankman-Fried also told Berkovitz in October 2021 that FTX was the natural choice to be the ‘umpires of the crypto industry,'” after Berkovitz described noticing at an MLB game that the league had a sponsorship agreement with the exchange.

In August 2022, the FDIC sent a cease and desist letter to FTX that instructed the exchange to stop illegally “misleading” consumers about the status of their funds.