Congressman Calls for Investigation Into SEC Chairman’s Role in FTX Fall

A Democratic congressman, Ritchie Torres, called upon the Government Accountability Office(GAO) to independently investigate the Security and Exchange Commission’s failure to prevent the downfall of FTX. In a letter sent on Wednesday, Torres asks GAO to review the SEC’S actions that led to FTX’s collapse last month.

Torres’ letter specifically targets the SEC’s Chair Gary Gensler, who regularly claims to have regulatory dominion over cryptocurrency exchanges while seemingly failing to regulate them. Torres questions Gensler’s failure to uncover the largest crypto Ponzi in United States history if he had the authority.

Congressman Questions SEC Chairman’s Decision to Investigate Celebrities Rather Than Crypto Exchanges

Torres continues to attack Gensler, accusing him of being singularly responsible for the regulatory failures. He criticizes Gensler’s decision to investigate people like Kim Kardashian instead of crypto exchanges. In October, the SEC fined the celebrity $1.2 million for promoting EthereumMax, which the agency had deemed as an unregistered security.

The SEC released a flashy video starring Gary Gensler on the day of the charge to promote awareness of the action. Torres found the video an uncommon practice in the typical realm of securities regulation, citing that the operating principle of the SEC is protecting the investing public rather than publicity for the political appointee in charge.

Gensler’s Leadership Leaves SEC’s Staff Demoralized

Also, Torres believes that Gensler’s policies have demoralized his staff. He points out SEC Inspector General, who reported the highest attrition rate in the decade under Gensler’s leadership. Additionally, Hester Peirce, an SEC Commissioner, once stated that Gensler’s approach is not a good way of regulating and that people have given up on the agency.

The Security and Exchange Commission is yet to impose charges against FTX despite the agency investigating the crypto exchange for several months. Following the FTX collapse, the Department of Justice and the Commodity Futures Trading Commission began investigations seeking to uncover the truth behind the FTX crypto exchange downfall.

The SEC could lose its monopoly over crypto regulation as a pending bipartisan Senate bill would grant Commodity Futures Trading Commission the most authority over crypto regulation if approved. Additionally, Torres tabled two bills in the Senate on Monday that would immediately enact crypto exchange regulations.