U.S. lawmakers plan to investigate the failure of FTX, the large crypto exchange that collapsed last week and filed for bankruptcy protection, leaving investors and customers staring at losses that could total in the billions of dollars.
The House Financial Services Committee said Wednesday that it expects to hear from Sam Bankman-Fried, the 30-year-old founder and former CEO of FTX, who was previously hailed as a hero in the crypto community but now faces potential civil and criminal charges related to FTX's collapse.
"The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds," committee chairperson Rep. Maxine Waters said in an emailed statement.
But the sheer size of FTX's collapse highlights the massive market risks inherent in the growing crypto industry. Billions of dollars of wealth may have been destroyed in a few days. The circumstances have prompted investigations by the Justice Department and Securities and Exchange Commission. Bankman-Fried has testified in Congress before, saying at a Senate Agriculture Committee hearing on the risks presented by digital assets in February that crypto firms should address risks to "ensure against substantial or catastrophic losses that could lead to existential threats against their own firm, thereby imperiling the assets of their customers."
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