US Congressman defends decentralization, blames SBF, Gensler, CeFi for FTX collapse

U.S. Congressman Tom Emmer said FTX's collapse is not a crypto failure, rather a failure of business ethics, government oversight and regulatory oversight.

Cover art/illustration via CryptoSlate

U.S. Congressman Tom Emmer said FTX’s collapse was not a crypto failure; instead, it was a failure of centralized finance (CeFi), Sam Bankman-Fried, and SEC’s Chairman Gary Gensler in a Nov. 22 Fox Business interview.

Emmer said FTX’s collapse was also a failure of business ethics, government oversight, and regulatory oversight.

Emmer carpets Gensler

The Minnesota Representative questioned the role of the SEC chair, Gary Gensler, in the FTX fiasco. He highlighted the meeting between the regulator and SBF in March. Emmer said:

“They were working with Sam Bankman-Fried and others to give them special treatment from the SEC that others aren’t getting.”

The lawmaker also criticized the SEC’s failure to investigate bad actors in the crypto space. Emmer wondered what the regulator was doing when several crypto firms like Terra Luna, Voyager Digital, and Celsius collapsed.

Instead, he alleged the Commission was working on “backroom deals” with the bad guys while investigating and prosecuting the good actors in the community.

“We need to get to the bottom of this—we need to understand why Gary Gensler and the SEC were not doing their job. We need to understand how this was allowed to get to the point where people’s savings are getting hurt.”

Meanwhile, the lawmaker said his office was investigating if the SEC chairman Gary Gensler was helping Sam Bankman-Fried and FTX obtain a regulatory monopoly.

Criticizes mainstream coverage of SBF

Emmer also criticized the New York Times for writing a puff on Sam Bankman-Fried. He said he did not understand why the media firm would write such a piece on “a guy who mismanaged funds.”

The crypto community severely criticized mainstream media outlets for portraying Sam Bankman-Fried as a virtuous individual.

Emmer absolves crypto of blame

The U.S. lawmaker reiterated that the FTX failure was not about crypto or decentralized finance. According to him, the focus should be on centralized finance and the need to regulate it.

“Decentralized finance is not what it’s about. It’s not about the crypto industry, this is about Sam Bankman-Fried and regulators.”

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