FTX Collapse Is 'Not a Crypto Failure,' Says Minnesota Rep. Tom Emmer

The newly appointed majority whip did not mince words when blaming Sam Bankman-Fried and SEC Chair Gary Gensler for the industry's current state.

By Jason Nelson

Congressman Tom Emmer. Image: U.S. House Office of Photography

Minnesota Representative Tom Emmer took both former FTX CEO Bankman-Fried and Securities and Exchange Commission chair Gary Gensler to task for the collapse of FTX and the resulting fallout.

"This is not just a failure of FTX," Emmer said on a Tuesday night Fox Business broadcast. "It's a failure of centralized finance and a failure of Sam Bankman-Fried."

The U.S. congressman and newly appointed Republican majority whip also condemned the collapse of FTX as a failure of business ethics, government oversight, and regulatory procedures, pointing to a March 23 meeting between Bankman-Fried and Gensler.

"They were working with Sam Bankman-Fried and others to give them special treatment from the SEC that others aren't getting," Emmer charged.

The congressman reserved much of his ire for the SEC chair, saying investigating these firms is what Gensler is supposed to be doing and asking where he was on Voyager and Celsius, Terra Luna, and more recently on FTX. The congressman then asked why the SEC chair was going after "good actors" in the community and working what he called "a backroom deal" with people doing nefarious things.

"Sam Bankman-Fried was pushing special treatment legislation through Congress," he said. "And when it was finally revealed what it was and the industry started raising red flags, that's when this thing came apart."

On November 9, 2022, Binance CEO Changpeng "CZ" Zhao said the company would not be buying FTX after entering talks to do so; several regulators began circling, opening investigations in the troubled cryptocurrency exchange.

On November 11, 2022, FTX filed for Chapter 11 bankruptcy protection.

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

One of the many entities affected by the bankruptcy of FTX, the Ontario Teacher Pension fund had over $95 million invested and stuck in FTX.

The investment represents 0.05% of its total net assets and will have a "limited impact" on the plan, the organization said.

Emmer reiterated his belief that the issue was not with cryptocurrency or decentralized finance. "This is about centralized finance, which needs to be brought under a regulatory umbrella and Gary Gensler has done nothing to make that happen," he said. "Decentralized finance is not what it's about. It's not about the crypto industry, this is about Sam Bankman-Fried and regulators."