Senators investigate CFTC chairman’s ties to Sam Bankman-Fried

Senators Warren (Democrat, Massachusetts) and Grassley (Republican, Iowa) have intensified their investigation into CFTC Chairman Behnam’s relationship with Sam Bankman-Fried, the convicted former CEO of FTX.

Warren and Grassley recently requested detailed records of all meetings and communications between Behnam and SBF during Behnam’s tenure. The request comes in the wake of Bankman-Fried’s recent sentencing to 25 years in prison for fraudulent activities at FTX. The senators are particularly interested in understanding the extent and nature of the interactions between Behnam and the fallen CEO.

Behnam’s frequent communications with Bankman-Fried were driven by efforts to position a segment of FTX, specifically its LedgerX division. This initiative was extensively discussed within the CFTC, with Bankman-Fried himself playing a prominent role in the discussions. Following FTX’s demise, senators including Josh Hawley asked Behnam for information about his and his staffers’ involvement with Bankman-Fried, sparking further investigations into the matter.

However, there is an additional layer to the problem: namely Bankman-Fried’s meetings with SEC Chairman Gary Gensler. The two had met in 2021 at the urging of Bankman-Fried’s father Joseph Bankman, a well-known law professor at Stanford who had drafted tax legislation for Elizabeth Warren herself.

While Gensler did not reveal anything about the meetings, it has been established that they met at least twice, once in the second half of 2021 and again in 2022 before the whole FTX debacle. This has not gone unnoticed by critics of Gensler and the SEC and has understandably raised questions about what the regulator or even Gensler itself could have done to prevent FTX’s implosion and subsequent fallout.

On the other hand, SBF’s mother Barbara Fried, also a law professor at Stanford, runs Mind the Gap, a Democratic donor group that raises donations from the technology sector. At the same time, Bankman-Fried was remarkably a major donor not only to Democrats, but also to Republicans.