Protect the Public’s Trust revealed yesterday that it had obtained a number of emails showing that former senior management of FTX tried to curry favor with the Federal Deposits Insurance Corporation (FDIC) by organizing a meeting with the agency’s chair a few months before FTX crashed. The emails were shared with news outlet the Washington Examiner.
Protect the Public’s Trust is one of the watchdogs in the United States that carry out investigative research to educate the public about possible misconduct by American government officials.
The Sender of the Emails
Mark Wetjen, the FTX.US’ director of policy, was the one who sent emails to Martin Gruenberg, the FDIC Chair, on behalf of the company’s then-CEO Sam Bankman-Fried. He pitched FTX to Gruenberg and also scheduled a meeting. Previously, Wetjen worked as a commissioner for the Commodity Futures Trading Commission.
In his emails, Wetjen emphasized the need for the United States government to regulate FTX and other exchanges as they are the pillar of the crypto ecosystem. On that very day, Gruenberg responded that he would be glad to meet Wetjen and Bankman-Fried.
FDIC’s spokesperson, who spoke to Washington Examiner, confirmed that the agency’s chair did meet once with the two FTX’s senior employees. Meanwhile, Julianne Breitbeil, the FDIC’s senior media relations officer, says it is usual for chairpersons of the agency to have courtesy visits with leaderships of various financial companies.
FTX in the Limelight
FTX was among the leading crypto exchange before its spectacular collapse in November 2022 caused by a massive bank run.
Following various probes, it came to light that former exchange executives had misappropriated customer funds. Now, ex-CEO Bankman-Fried is facing twelve criminal charges, including conspiracy to commit wire fraud and money laundering.
Last week, a $1 billion lawsuit was filed against several content creators, accusing them of promoting FTX, which the complainants claim was a fraud trading platform. Some of the Youtube influencers mentioned as defendants include Graham Stephan, BitBoy, and Ben Armstrong.
Further, a document submitted to the court by new FTX leadership shows Bankman-Fried and other executives were paid over $3.2 billion, with most of the money coming from the trading company Alameda Research.