Senate Democrats are calling for a criminal investigation into the second-largest donor of the Democrat Party's 2021-2022 election cycle, CEO and founder of the now-bankrupt cryptocurrency exchange FTX Sam Bankman-Fried.
On Wednesday, Democrat Sens. Elizabeth Warren of Massachusetts and Sheldon Whitehouse of Rhode Island sent a letter to Attorney General Merrick Garland calling for a criminal investigation into what they called the "fraudulent tactics" perpetrated by Bankman-Fried.
"Given the department's commitment to holding perpetrators of white-collar crime personally accountable, we expect DOJ to investigate the actions leading to the collapse of FTX with the utmost scrutiny," the senators wrote in their letter.
If taken up, the Justice Department led by Garland, who was appointed by President Joe Biden, would be investigating Bankman-Fried, who "contributed more than $5 million" to PACs supporting Biden during his 2020 presidential campaign, MarketWatch reported. At the time, the cryptocurrency mogul said "he was motivated by Biden's 'generic stability and decision-making process.'"
Warren is a member of the Senate Banking Committee, and Whitehouse sits on the Senate Judiciary Committee; they argue that Bankman-Fried "revealed his true interests of self-enrichment last year when he siphoned $300 million to his own wallet."
"John Jay Ray," the senators add in their letter, worked as "an executive who has managed multiple companies through bankruptcy, including the energy trading giant Enron, and who has since taken over as FTX CEO, shed new light on Bankman-Fried's negligence in a court filing last week.
"In the filing, 'Mr. Ray described an astonishing level of disarray and said he had never seen "such a complete failure of corporate control."' Mr. Ray called it an unprecedented situation, spurred by 'compromised systems integrity and faulty regulatory oversight abroad' and 'the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals.' He described 'the use of software to "conceal the misuse of customer funds,"' and told the court the financial statements produced under Bankman-Fried could not be trusted, given that '[FTX] did not keep appropriate books and records, or security controls, with respect to its digital assets.'"
Prior to the senators' letter to Garland, Warren on Tuesday published an op-ed in The Wall Street Journal calling for the regulation of cryptocurrency.
"FTX's implosion should be a wake-up call," she wrote. "Regulators must enforce the law before more people get cheated, and Congress must plug the remaining holes in our regulatory structure — before the next crypto catastrophe takes down our economy."
The congresswoman goes on to add in her Journal op-ed that "if Mr. Bankman-Fried and FTX executives committed fraud, then federal prosecutors should send them to prison."
Since the outbreak of the story following FTX's collapse, a surge of rhetoric regarding the exchange has been sparked on both sides of the political aisle.
Last week, House Republicans sent a letter to Secretary of State Antony Blinken. In their letter, Reps. Troy Nehls and Louie Gohmert of Texas, Mary Miller of Illinois and Byron Donalds of Florida cited their concerns that U.S. military aid sent to Ukraine may have been improperly invested into FTX.
"It has come to our attention that billions of taxpayer dollars sent to Ukraine to assist with their war efforts were potentially invested in a crypto exchange that then made massive donations to Democrats."
They added, "We sincerely hope the primary driver behind the billions in Congressional assistance to Ukraine was not Democrats attempting to keep themselves in power, and that none of the missing funds were used as a passthrough to avoid campaign finance laws or end up in Democrat pockets."
While there has been no evidence to support claims of money laundering, Nehls later took to Twitter to highlight four points surrounding the situation.
"Here's what we know," the congressman tweeted: "The White House funded Ukraine. Ukraine partnered with FTX. FTX funded Democrats with tens of millions during the midterms. The American people deserve answers."
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