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Senators probe CFTC chair's ties with Sam Bankman-Fried

Lawmakers probe into the CFTC's relationship with SBF, dark figures in a meeting room.

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Senators Warren (D, Massachusetts) and Grassley (R, Iowa) have intensified their scrutiny of CFTC Chair Behnam’s relationship with Sam Bankman-Fried, the convicted former CEO of FTX.

Warren and Grassley have recently requested detailed records of all meetings and communications between Behnam and Bankman-Fried during Behnam’s tenure. The request comes in light of Bankman-Fried’s recent sentencing to 25 years in prison for fraudulent activities at FTX. The senators are particularly interested in understanding the extent and nature of the interactions between Behnam and the disgraced CEO.

Behnam’s frequent communication with Bankman-Fried was driven by efforts to position a segment of FTX, specifically the LedgerX division. This initiative was discussed extensively within the CFTC, with Bankman-Fried himself playing a prominent role in the discussions. Following the collapse of FTX, senators, including Josh Hawley, have pressed Behnam for information on his and his staff’s engagements with Bankman-Fried, prompting further inquiries into the matter.

There is, however, the additional layer to the issue: namely Bankman-Fried’s meetings with SEC chair Gary Gensler. The two had met in 2021 at the urging of Bankman-Fried’s own father Joseph Bankman, a noted Stanford law professor who had drafted tax legislation for Elizabeth Warren herself. While Gensler remained tight-lipped about the meetings, it has been established that the two met at least twice, once in the latter half of 2021 and again on 2022 before the entire FTX debacle. This was not missed by critics of Gensler and the SEC and has understandably raised questions as to what the regulator or even Gensler himself could have done to prevent FTX’s implosion and the ensuing fallout.

On the other hand, SBF’s mother Barbara Fried, also a law professor at Stanford, leads Mind the Gap, a Democrat donor group raising donations from the tech sector. At the same time, Bankman-Fried was notably a big donor not just to the Democrats, but also the Republicans.

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