Crypto Community Demands Investigation Into Gensler-FTX Ties

The crypto community is petitioning U.S. Congress to investigate possible connections between SEC chair Gary Gensler and FTX.

Gensler Met With FTX

The crypto public is calling for a congressional investigation into SEC Chair Gary Gensler’s relationship with FTX and its officers.

Legal news site Crypto-Law.com revealed on Twitter today that it had facilitated the delivery of over 9,000 letters to Congress demanding an investigation of Gensler’s potential ties to the failed exchange. The petition template notes that “evidence has emerged” that Gensler met with former FTX CEO Sam Bankman-Fried, who “masterminded” the exchange before last week’s collapse.

SEC documents confirm that Gensler met with Sam Bankman-Fried and two other FTX personnel in March. According to those records, the group discussed “the unique risks associated with custody of digital asset securities.” Four members of IEX Exchange, which would later gain financial backing from FTX, also attended the meeting.

Critically, the meeting memo mentions “conditional no-action relief.” According to a 2020 statement from the SEC, conditional no-action relief is” a mechanism that allows registrants to obtain certain assurances when their conduct may touch upon a gray area of regulation, or even may be technically proscribed, but does not raise the policy concerns underlying a particular rule.” However, there is no evidence that FTX was granted this consideration.

According to reporting from Fox Business correspondent Charles Gasparino, the meeting amounted to a “45-minute lecture by Gensler,” who made no promises and demanded greater disclosure from both exchanges. “No approval was signaled,” he wrote.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other crypto assets.