Sen. Tuberville to Newsmax: FTX Founder 'Skirted the Rules'

Lawmakers have dragged their feet on regulations for cryptocurrency, leading to the scandal-filled collapse of the FTX exchange company, Sen. Tommy Tuberville said on Newsmax on Thursday.

However, the Alabama Republican told Newsmax's "National Report" that FTX founder Sam Bankman-Fried "knew that the money was going through the back door" to an affiliated company without knowing there were already rules against such behavior.

"He skirted the rules and that's what you do when you don't know that there's a rule book out there," Tuberville said. "That's the reason that we've got to get rules to this where we can move crypto back into our country. We want to be the leader of innovation when it comes to financial dealings across the world and right now we've dropped the ball, so we've got to get on that. We've got to start with it immediately."

Bankman-Fried said in an interview with ABC News earlier Thursday that he knew there was a borrowing-lending facility at FTX, but he didn't know deposits were used to pay affiliated trading firm Alameda Research.

The Senate Agriculture Committee on Thursday was holding its first hearing to determine if there are potential regulatory actions to prevent further such meltdowns, said Tuberville, a committee member.

The senator added that he's "not big" on government expansion, but "we have to have rules" or it would be "like having a football game and not having any rules."

"These young people took advantage of not having rules and now there are billions of dollars floating around somewhere that's lost," said Tuberville. "Probably nine out of 10 investors that were with FTX didn't didn't have a clue what crypto was because it's hard to understand."

The matter is before the Agriculture Committee because it is in charge of commodities, said Tuberville, and members will question Russ Benham, the chairman of the Commodities Futures Exchange about why he thought the collapse happened.

"We've got to protect the American people," said Tuberville.

Tuberville acknowledged that there may not have been many rules in the Bahamas, where FTX was the first exchange to register under the new crypto regulation, and said he wants to ask Bankman-Fried about what he would have done if his company was based in a U.S. city like New York, Atlanta, or St. Louis.

Meanwhile, there are "two good bills" with "good rules and regulations that we can put into place," but Tuberville said Democrats haven't brought them to the Senate floor.

"There might be a reason for that," he said.

Meanwhile, House members Wednesday voted on legislation to stop an impending rail workers' strike, and Tuberville said union bosses and President Joe Biden, who considers himself a union man, "dropped the ball on this."

"I would normally stand behind the workers," Tuberville said, as the bill heads to the Senate. "This should have been done months ago. They said it was done. They pushed it past the election.

"That's the reason they did that. They've been playing politics with this, but they're playing politics with tens of thousands of workers."

Tuberville said he hasn't made up his mind on whether he'll vote for the legislation, "but I'm leaning toward standing with the workers and not voting for this."

However, he said if there is a rail strike, it would be "devastating to the economy."

"It would be like taking 500,000 trucks a day off the road," said Tuberville. "Our economy would tank even more than what it's tanking. We're on the edge if we're not already in a recession, but this would definitely put us in that category. The American people don't deserve that."

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