House and Senate lawmakers are set to hold back-to-back hearings this week on the collapse of FTX and the role of Sam Bankman-Fried, the founder and former CEO of the bankrupt cryptocurrency firm.
Members of the House Financial Services Committee and Senate Banking Committee are set to launch their investigations into how FTX fell apart and how Bankman-Fried led a company once valued at $32 billion into ruin. While they’ll have plenty of pointed questions for Bankman-Fried, Congress is also fuming at federal regulators and pondering its own role in the crisis.
“The FTX collapse has the potential to be Madoffesque in scope and size of dollars that have been lost or misappropriated,” said Mark A. Kornfeld, an attorney specializing in financial and investment law at Buchanan Ingersoll & Rooney, in a Friday interview, referring to the $64.8 billion Ponzi scheme perpetrated by Bernard Madoff.
“You are going to see lots and lots of different lanes being tread,” he said.
Here are the five big questions surrounding the collapse of FTX.
How much did Bankman-Fried know before FTX went bankrupt?
FTX collapsed last month after a series of reports about the firm’s shoddy financial health triggered panic among its millions of users. Over a three-day span, FTX customers attempted to withdraw billions of dollars of their own funds held on the company’s platforms, but FTX lacked enough actual U.S. dollars to reimburse many…
