FTX founder Sam Bankman-Fried says he’ll testify before House panel virtually

Sam Bankman-Fried, the founder and former CEO of bankrupt cryptocurrency platform FTX, says he will indeed testify before the House Financial Services Committee on Tuesday but indicated he will do so virtually.

“I’m going to be calling in,” Bankman-Fried said on the “Unusual Whales” finance podcast.

Panel Chairwoman Maxine Waters (D-Calif.) and ranking member Patrick McHenry (R-N.C.) had heavily pressured Bankman-Fried to testify at Tuesday’s hearing, but he initially resisted, saying he would wait until he finished “learning and reviewing” what led to FTX’s collapse.

But last week, Bankman-Fried, previously a rather common face on Capitol Hill, signaled he would appear on Tuesday after Waters insisted he do so given that he conducted a number of media interviews in recent days.

“I want to make sure that everything that I say everywhere, but especially there, is not just something I think is probably true but is something that I am extremely confident is true or else disclaim extremely clearly and specifically,” he said on the podcast. 

“Because it’s very, very important that I not state things in a way that I’m overconfident about in front of Congress,” he added. “And that all led me to feel like it was going to be somewhat awkward and less informative than I would want it to be.”

Bankman-Fried has resided in the Bahamas since the cryptocurrency platform collapsed last month amid intense scrutiny of his business decisions, although he has not been charged with any crime.

The Senate Banking Committee has also sought Bankman-Fried’s testimony and has threatened to subpoena him.

He stepped down as CEO as the company filed for Chapter 11 bankruptcy last month following mass withdrawals from customers.

John J. Ray III, a restructuring expert who took over as chief executive from Bankman-Fried to lead the company through bankruptcy, is also slated to appear at Tuesday’s hearing.

“Although our investigation is ongoing and detailed findings will have to await its conclusion, the FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray wrote in prepared remarks for the hearing.

Ray previously oversaw Enron’s liquidation when it filed for bankruptcy in 2001 and a number of other major companies.

“Never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever,” Ray plans to say.