Sam Bankman-Fried Told Crypto Regulators That His Company Was “Natural Choice” to Be “Umpires” of Industry

EXCLUSIVE — Sam Bankman-Fried, the disgraced former FTX CEO charged with fraud and money laundering, told a then-top official for a key financial regulator that FTX was destined to be the “umpires of the crypto industry,” emails show.

“Ryne, Thank you for the update and links,” Dan Berkovitz, who at the time was a commissioner for the U.S. Commodity Futures Trading Commission, one of several agencies that regulate cryptocurrency, wrote in an Oct. 14, 2021, email to FTX lawyer Ryne Miller, Bankman-Fried, then-FTX President Brett Harrison, then-CFTC Commissioner Mark P. Wetjen, and Zach Dexter, CEO of the cryptocurrency company LedgerX.

“I was watching the Dodgers v. Giants the other night and saw that FTX is the Official Cryptocurrency Exchange of Major League Baseball (I gather this is not news). I’m not sure why MLB needs to have a cryptocurrency exchange, but glad to see that it has one that supports regulation!” Berkovitz continued in the email, which, along with others, was obtained by the watchdog Protect the Public’s Trust through the Freedom of Information Act and first shared with the Washington Examiner.

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Roughly five hours later, Bankman-Fried responded with one sentence: “We are the natural choice to be the ‘umpires of the crypto industry.'”

The newly unearthed emails shed light on how Bankman-Fried sought to cozy up to government officials who wielded significant power over the future of FTX and the cryptocurrency space as a whole. Bankman-Fried, who at one point was estimated to be worth roughly $26.5 billion, is being accused by the Justice Department of a slew of crimes. He was arrested on Monday at his home in the Bahamas.

The CFTC on Tuesday charged Bankman-Fried, FTX, and Alameda Research with fraud — alleging that the defendants caused the loss of more than $8 billion in FTX customer funds. He faces up to 115 years in prison and is currently being held at a maximum security unit in Fox Hill, a reportedly overcrowded Bahamas prison filled with maggots, rats, and poor sanitation standards, according to the State Department.

Protect the Public’s Trust Director Michael Chamberlain told the Washington Examiner that the scandals surrounding FTX are only getting “more and more alarming.”

“The man recently indicted for outright fraud by the DOJ was expanding his tentacles into the centers of government and attempting to leverage his political connections to make his firm the ‘umpires of the crypto industry,'” said Chamberlain. “All the while, billions in investor, customer, and employee wealth were evaporating.”

Regulators, such as the CFTC and the Securities and Exchange Commission, have sparred over the best ways to regulate cryptocurrency. In October, the CFTC released a report noting that over 20% of its 82 enforcement actions for fiscal 2022 were in connection to cryptocurrency.

“Digital commodity asset markets continue to present risks for investors due to the lack of basic protections,” CFTC Chairman Rostin Behnam said on Tuesday. “The CFTC continues to be fully committed to using all available enforcement tools and authorities to protect investors and root out those who seek to profit through fraud and misappropriation.”

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However, the CFTC has faced criticism for allegedly catering to the cryptocurrency industry and taking little action to regulate it. Dennis Kelleher, CEO of the financial nonprofit group Better Markets, said in a November memo that the CFTC is “cheerleading the industry” rather than “trying to expand its jurisdiction” to protect investors.

FTX did not respond to a request for comment, nor did the CFTC.