This is CNBC’s live blog covering Tuesday’s hearing on the collapse of cryptocurrency exchange FTX before the House Financial Services Committee.
The House Financial Services Committee is holding a hearing Tuesday morning on the collapse of cryptocurrency exchange FTX following the Monday night arrest of founder Sam Bankman-Fried in the Bahamas.
The Justice Department and Bahamian authorities said Bankman-Fried, who was previously scheduled to testify before the panel, was arrested based on an sealed indictment in the U.S. that was unsealed shortly after the hearing started.
The U.S. Attorneys Office for the Southern District of New York charged the disgraced crypto executive with eight criminal counts: conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering and conspiracy to avoid campaign finance regulations.
John J. Ray, the company’s new CEO, is the panel’s sole witness. The company imploded and filed for Chapter 11 bankruptcy last month after reportedly transferring billions of dollars in FTX customer funds to Bankman-Fried’s hedge fund, Alameda Research.
The Securities and Exchange Commission also charged the former crypto “darling” Tuesday morning with allegedly “orchestrating a scheme to defraud equity investors in FTX Trading,” according to the agency.
The Senate Banking Committee had also asked Bankman-Fried to testify at a Wednesday hearing that he previously refused to attend.
Prior to his company’s implosion, Bankman-Fried donated almost $40 million to candidates, campaigns and political action committees in the 2022 congressional midterm elections, with most of his publicly disclosed contributions going toward Democrats. Ryan Salame, the co-CEO of FTX Digital Markets, donated another $23 million, with the majority of his contributions heading toward Republicans.
