### In a rare show of unity, lawmakers from both sides of the aisle want more regulations when it comes to crypto exchanges. Bankman-Fried's tweets may come back to haunt him. 

It is increasingly clear that the FTX situation is approaching train wreck levels. But the wreckage is starting to look like it won’t just affect the beleaguered crypto exchange. Calls for regulatory changes are getting louder, as initiated by lawmakers and federal agencies.


US State and federal agencies, including the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), are investigating FTX. Because FTX is registered and operates in the Bahamas, the Securities Commission of the Bahamas and the Bahamas’ Financial Crimes Investigation Branch are also taking a look at FTX’s operations.


According to media reports, the SEC is in a better position to investigate FTX because of its mandate. The fact that FTX is headquartered in the Bahamas is not expected to be a hindrance to investigations since the FTX is connected to the U.S., which gives the SEC and DOJ jurisdiction.


In a move largely seen as preparation for these investigations, FTX US General Counsel Ryne Miller instructed the company to preserve documents.

#### Bipartisan Calls for an Investigation


Calls for an investigation are coming from both sides of the aisle after FTX declared bankruptcy. According to Ron Hammond, Director of Government Relations of the Blockchain Association, some U.S. lawmakers are talking about holding hearings as early as the end of the year.

Some of the names who want to take a look at FTX’s collapse are Senate Banking Committee Chair Sherrod Brown (D-Ohio) and Sen. Elizabeth Warren (D-Mass.).

In a statement, House Financial Services Committee Member Rep. Brad Sherman (D-Calif) said that the collapse was “a dramatic demonstration of both the inherent risks of digital assets and the critical weaknesses in the industry that has grown up around them.”

Republican lawmakers like Rep. Patrick McHenry (R-N.C.), the current ranking member on the House Financial Services Committee, Rep. Warren Davidson (R-Ohio), and Sen. Pat Toomey (R-Pa.) called for Congress or regulatory agencies to provide clearer guidelines in the operation of crypto exchanges to operate.


#### The Bankman-Fried Tweets

Complicating the matter for FTX is that its founder and former executive Bankman-Fried posted statements on Twitter throughout the company’s collapse.

On Nov. 7, Bankman-Fried announced that “FTX has enough to cover all client holdings,” in response to reports that FTX is facing financial trouble.


<blockquote className="twitter-tweet">A deleted tweet from Sam Bankman-Fraud. <a href="https://t.co/5Rqy63aqwQ">pic.twitter.com/5Rqy63aqwQ</a>&mdash; Tytan.ETH 🐧 (@Tytaninc) <a href="https://twitter.com/Tytaninc/status/1590444024095461376?ref_src=twsrc%5Etfw">November 9, 2022</a></blockquote> 



He also said that news about the company’s solvency is rumors instigated by a competitor, but that FTX’s “assets are fine.”

<blockquote className="twitter-tweet">Step 4: LIE Sam responded in a (now deleted) tweet stating &quot;a competitor is trying to go after us with false rumors.&quot; He goes on to even say that &quot;FTX is fine. Assets are fine.&quot; <a href="https://t.co/t8hiIzsft7">pic.twitter.com/t8hiIzsft7</a>&mdash; D-Rex (@DRexProtocol) <a href="https://twitter.com/DRexProtocol/status/1591216582562545665?ref_src=twsrc%5Etfw">November 11, 2022</a></blockquote> 

 
Just hours before FTX US warned users that it might suspend withdrawals, Bankman-Fried tweeted that FTX US had no liquidity issues.

The tweets were later deleted.

It is expected that agencies like the SEC, FTC, and possibly the Department of Justice will be looking at these social media posts. Some legal experts believe that it is possible that the tweets may create a basis for criminal and civil claims.

While it is possible that Bankman-Fried believed that FTX was stable up until the end, it is also possible that he knowingly provided inaccurate information. It is this possibility of fraud that makes it almost certain that his tweets will be brought up in litigation.

In a rare show of unity, lawmakers from both sides of the aisle want more regulations when it comes to crypto exchanges. Bankman-Fried's tweets may come back to haunt him. 

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Tue Nov 15 2022

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