Two Democratic Senators penned a letter to the Department of Justice (DOJ) on Wednesday urging Attorney General Merrick Garland to investigate the “disturbing allegations of fraud and illicit behavior that led to the collapse of [FTX]” – and demanding that the company’s executives be held accountable “to the fullest extent of the law.”
In the letter, Sens. Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) reminded Garland and Assistant Attorney General Kenneth Polite of the DOJ’s recently renewed commitment to prosecuting white-collar criminals, and asked that they honor that commitment when investigating the behavior of former FTX CEO Sam Bankman-Fried and other executives “with the utmost scrutiny.”
Warren, a long-time critic of the crypto industry, has closely monitored the collapse of the Bahamas-based FTX, as well as the ripple effects that collapse has had across the wider industry.
On Tuesday, Warren, Durbin, and Sen. Tina Smith (D-Minn.) sent a letter to Fidelity, asking the financial services firm to reconsider allowing retail clients to include bitcoin in their retirement plans. And last week, Warren and fellow Senator Dick Durbin (D-Ill.) sent a letter to Bankman-Fried and FTX’s current CEO, John Jay Ray III, asking for information about what precipitated the exchange’s collapse.
In addition to the knock-on effect across the wider crypto industry, Warren and Whitehouse’s letter expresses concerns about the impact of FTX’s implosion on retail investors, who they say were given a “false sense of safety and legitimacy” by FTX’s “high-dollar advertisement placements and celebrity endorsements.”
Though the letter urges the DOJ to investigate and prosecute all FTX executives potentially embroiled in the alleged fraud, Bankman-Fried bears the brunt of Warren and Whitehouse’s ire.
“The fall of FTX was not simply a result of sloppy business and management practices, but rather appears to have been caused by intentional and fraudulent tactics employed by Mr. Bankman-Fried and other FTX executives to enrich themselves,” the senators wrote. “In fact, Mr. Bankman-Fried had already revealed his true interests of self-enrichment last year when he siphoned $300 million to his own wallet.”
Read more: The FTX Downfall: Full Coverage
