Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), throughout a Senate Agriculture, Nutrition and Forestry Committee hearing in Washington, D.C., U.S., on Wednesday,Feb 9, 2022.
Sarah Silbiger|Bloomberg|Getty Images
WASHINGTON– The creator and previous CEO of stopped working cryptocurrency exchange Sam Bankman-Fried consulted with top-level authorities at the Commodity Futures Trading Commission more than 10 times over the past 14 months, consisting of with CFTC Chairman Rostin Behnam.
Behnam affirmed Thursday prior to the Senate Committee on Agriculture, Nutrition, and Forestry, which manages the country’s products markets. The CFTC head informed senators that the conferences with Bankman-Fried focused around FTX’s “dogged” desire to modify the clearinghouse license for LedgerX LLC, which FTX purchased in 2021 and is supervised by the CFTC.
The modification, which was submitted about 12 months earlier, would have enabled LedgerX to straight settle crypto derivatives without the participation of intermediaries. The proposed modification was still pending approval by the time FTX applied for personal bankruptcy previously this month.
“My team and I met with Mr. Bankman-Fried and his team. Over the past 14 months, we met 10 times in the CFTC office at their request all in relation to this (derivatives clearing organization); this clearinghouse application,” Behnam informed committee chairSen Debbie Stabenow, D-Mich
In his opening declarations, Behnam stated LedgerX has actually been signed up with the CFTC because 2017 and was among the couple of FTX entities that didn’t apply for personal bankruptcy in addition to FTX last month.
Bankman-Fried stepped down as FTX CEO and the business applied for Chapter 11 personal bankruptcy last month.
“The CFTC has been in near-daily contact with LedgerX as well as the third-party custodians it uses to hold cash and digital assets,” Behnam stated. “Based on the information presented to us, at this time, LedgerX customer property remains secure and LedgerX has the financial resources to continue operating for the foreseeable future.”
Behnam stated the majority of his conferences with Bankman-Fried and the FTX group happened in Washington, however there was likewise a conference at a conference in Florida, 2 call and a variety of messages targeted at moving the application along.
Later in the hearing, Behnam informedSen Tommy Tuberville, R-Ala, that e-mails were likewise exchanged in between the celebrations.
“Some of the messages were about scheduling the 10 meetings I mentioned,” Behnam stated. “But it was about updates, giving us, again, this dogged approach to ‘we submitted answers to the questions from the division or we have more data to just support their advocacy of this application,’ all in relation to the application.”
The CFTC chair stated he didn’t understand the number of times Bankman-Fried or FTX executives consulted with other personnel at the company, however he stated they remained in the structure “quite a bit” to talk about the information of the clearinghouse application.
“I made a decision very early to be as transparent as possible with the process,” Behnam stated. “There were very, very strong feelings about this application. And I felt I needed to be engaged as the chairman of the agency that met directly with FTX and Mr. Bankman-Fried.”
The commission was evaluating FTX’s application at the time it applied for personal bankruptcy. Behnam stated there had actually been no choice sinceNov 11, when FTX revealed its personal bankruptcy.
