SEC Cannot Protect Society from FTX-Torres
2022.12.07 14:21
SEC Cannot Protect Society from FTX-Torres
Budrigannews.com – An American legislator has asked the Government Accountability Office (GAO) to investigate how the Securities and Exchange Commission (SEC) handled the crypto exchange FTX, which failed recently.
On December 6, Representative Ritchie Torres wrote to U.S. Comptroller General Gene Dodaro requesting that the GAO, the federal legislative watchdog, examine the SEC’s failure to safeguard the public from “the egregious mismanagement and malfeasance of FTX.” In addition, chairman Gary Gensler’s leadership in general was criticized in the blunt letter. Torres penned:
“If the SEC had done the due diligence of thoroughly investigating the financials of FTX, there would have been a greater likelihood of exposing the crypto exchange for what it truly is: a house of car[d]s built on monopoly money printed out of thin air.”
Aside from that section, the majority of Torres’ letter was devoted to a criticism of SEC chair Gensler, who was described as “singlely responsible for regulatory failures surrounding the collapse of FTX and its affiliate FX US” by Gensler. Torres asked rhetorically in response to Gensler’s insistence that the majority of cryptocurrencies are securities and are therefore subject to SEC regulation:
“If the SEC has the authority [as] Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history?”
NEW this morning — Rep. @RitchieTorres (D-NY) calls on the Government Accountability Office (@USGAO) to investigate the SEC’s “failure to protect the investing public from the egregious mismanagement and malfeasance of @FTX_Official” pic.twitter.com/BdT7ZVCM7X
— Alexander Grieve (@AlexanderGrieve) December 7, 2022
Similar to Gensler, Torres is a Democrat who represents New York City’s South Bronx. He is an outspoken advocate for cryptocurrencies. Ironically, in March, he cosigned a letter from both parties that questioned the authority of the SEC to request information from crypto companies and was written by Rep. Tom Emmer. After the FTX collapse, Emmer has also questioned Gensler’s oversight.
Torres introduced two bills to the House of Representatives on December 2: “To prohibit lending, leveraging, or co-mingling customer funds by cryptocurrency exchanges without consent of a customer” and “To require certain cryptocurrency exchanges to make disclosures relating to proof of reserves to the Securities and Exchange Commission, and for other purposes.” The House Financial Services Committee has been assigned to review the bills.
