Sam Bankman-Fried will testify before Congress
In a tweet on Friday morning, FTX founder Sam Bankman-Fried agreed to testify at a hearing in front of the House Financial Services Committee, although there is still uncertainty about whether he will appear before the Senate Banking Committee the following day—under threat of subpoena.
After the early November collapse of FTX, one of the largest crypto exchanges, members of Congress have renewed calls for regulation of the volatile industry, as well as investigations into the bankruptcy.
The Senate Agriculture Committee, which introduced crypto legislation called the Digital Commodities Consumer Protection Act earlier this year, was the first to hold a hearing on FTX, on Dec. 1. According to a person with direct knowledge of the matter, the Agriculture Committee did not invite Bankman-Fried to testify.
The next two congressional hearings will be held by the House Financial Services Committee and the Senate Banking Committee, on Dec. 13 and 14, respectively. Chair Maxine Waters (D-Calif.) of the House Financial Services Committee invited Bankman-Fried over Twitter to testify, and he initially declined. She denied reporting from CNBC that she would not consider a subpoena, although his change of mind on Friday to appear means that a subpoena is no longer necessary, at least for the House.
It is unclear whether he will appear in person or virtually. Bankman-Fried did not respond to a request for comment.
The Senate Banking Committee took a stronger stance, with Chair Sherrod Brown (D-Ohio) issuing a public letter to the disgraced founder on Dec. 7, warning that if Bankman-Fried did not agree to testify, Brown was prepared to subpoena him.
According to a statement issued by Brown and ranking member Pat Toomey (R-Pa.) on Thursday night, Bankman-Fried did not respond to their request. Toomey tweeted on Friday morning that Bankman-Fried still hadn’t responded, despite agreeing to testify in front of the House Financial Services Committee. A spokesperson for the Banking Committee declined to answer whether it would proceed with the subpoena, directing Fortune to its letter to Bankman-Fried from Wednesday and statement from Thursday.
Even if the Senate Banking Committee did issue a subpoena, there is a jurisdictional question over its ability to serve Bankman-Fried overseas, as he’s reportedly still in the Bahamas. Mark Kornfeld, an attorney at Buchanan Ingersoll & Rooney focused on regulatory enforcement, told Fortune that Congress’s subpoena powers on foreign soil is an unsettled issue, including how Congress would enforce the subpoena in cooperation with the Bahamian government.
“It’s an interesting procedural morass,” Kornfeld said.
While the Senate Banking Committee figures out its path forward, Bankman-Fried’s appearance on Dec. 13 before the House Financial Services Committee likely will be the first time he testifies under oath.
Whether he provides any useful information remains to be seen. Bankman-Fried has stated that he does not have access to the information that members of Congress are seeking. As he tweeted in response to Waters, “There is a limit to what I will be able to say, and I won’t be as helpful as I’d like.”
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