Elizabeth Warren Demands U.S. CFTC Chair Explain His Chats With SBF
CFTC chief Rostin Behnam previously disclosed there were meetings and messages with FTX's Sam Bankman-Fried, but he hasn't granted another senator's call to see all the records.
Updated Apr 15, 2024, 8:36 p.m. Published Apr 15, 2024, 7:33 p.m.
The head of the U.S. Commodity Futures Trading Commission (CFTC), Rostin Behnam, had a lot of contact with Sam Bankman-Friend, the disgraced former CEO of FTX, but lawmakers suggest he hasn't been fully forthcoming about those interactions. So, Sens. Elizabeth Warren (D-Mass.) and Chuck Grassley (R-Iowa) are demanding more.
Warren and Grassley sent Behnam a letter calling for "an accounting of all meetings and correspondence between you and Sam Bankman-Fried during your tenure." Over a 14-month period, CFTC officials had met with Bankman-Fried and his team as many as 10 times at the agency, and Behnam told lawmakers in 2022 that he'd also exchanged "a number of messages" with the FTX founder, who was recently sentenced to 25 years in prison for the massive fraud perpetrated there.
For his part, Behnam and his agency have at least one significant reason for communicating so often with the FTX CEO: He was trying to push a part of his company – the LedgerX division that was spun off again after the collapse to return to its original name – into a unique position to directly handle margined derivatives trading for customers without a go-between firm. The failed effort had even been the topic of an in-house roundtable discussion at the CFTC in which SBF starred on a big panel otherwise filled with industry opponents.
In a Senate hearing in 2022 just after the meltdown of FTX, Grassley and another senator asked Behnam for information on his and his staff's meetings and text conversations with Bankman-Fried. Afterwards, Sen. Josh Hawley (R-Mo.) asked for records of correspondence between FTX, the CFTC, other government agencies and the White House.
The new letter from Warren and Grassley, dated April 12, again asks for such correspondence, detailing that they want copies of all written communications, plus minutes and timelines of interactions.
"We just received these letters, so we will work with the office to get them the information they need," said Steven Adamske, a spokesman for the CFTC.
The chief of the other U.S. markets regulator, Securities and Exchange Commission Chair Gary Gensler, has similarly drawn scrutiny for his agency's interactions with SBF in the months before the company's dramatic collapse.
Read More: U.S. CFTC Warns About Clearing Derivatives Tied to Digital Assets
UPDATE (April 15, 2024, 20:36 UTC): Adds response from CFTC.
Jesse Hamilton
Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.
