On Tuesday, Rep. Ritchie Torres (D-Crypto) sent a letter to the Government Accountability Office, asking them to produce a study into the Securities and Exchange Commission’s alleged failure to prevent the collapse of FTX, “the largest crypto Ponzi scheme in US history.” Torres described SEC chair Gary Gensler as “singularly responsible” for the regulatory failure on FTX, which he called “a house of cars” (I presume he meant cards; it’s too much to ask for a member of Congress to proofread an official letter, apparently).
Left unsaid is the fact that Torres was a member of the “Blockchain Eight,” who back in March tried to get the SEC to back off of an investigation into crypto firms that included FTX, as the Prospect explained last month. Torres told Punchbowl News that the Blockchain Eight letter was about “making sure the SEC was efficient and focused,” but members’ own statements at the time refute that: It was very clear that the goal was to stop the investigation. As Torres says in his own letter, “One cannot have it both ways, asserting authority while avoiding accountability.”
As it happens, I was able to discuss the mess at FTX, and the role that politicians and the media played in protecting what we now know to be a fraud scheme, on The Problem With Jon Stewart podcast. Jon and I talked about what happened at FTX, how Sam Bankman-Fried managed to charm elites and buy their silence, and how familiar the whole crypto scam feels, as just a rather dull and well-worn way for financiers to separate people from their money.
