House lawmakers to probe FTX collapse in December hearing

In a rare show of bipartisan agreement, U.S. lawmakers are set to launch an investigation as the bankruptcy of crypto exchange FTX has sent cryptocurrency markets spiraling and left more than a million creditors hanging out to dry.

The chairwoman and ranking member of the House Financial Services Committee on Wednesday announced a hearing will be held in December to examine the collapse of FTX and "the broader consequences for the digital asset ecosystem." 

The committee will call on FTX founder Sam Bankman-Fried to testify, as well as representatives from Alameda Research, Binance, FTX, and related entities, lawmakers said. 

"Chairwoman Waters and I are announcing a House Financial Services Committee hearing on the FTX debacle," said Ranking Member Rep. Patrick McHenry, R-N.C., in a statement. "Oversight is one of Congress’ most critical functions and we must get to the bottom of this for FTX’s customers and the American people. It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system." 

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The hearing will be held during the lame-duck session of Congress, with Democrats remaining in control of House committees before turning the chairs over to the newly-elected Republican majority in January. McHenry thanked Chairwoman Rep. Maxine Waters, D-Calif., for "working with Republicans to deliver accountability through a bipartisan process." 

"The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds. Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year," Waters said.  

"As Chairwoman of the Financial Services Committee, I have led the effort in examining and investigating the digital assets marketplace, and know that we need legislative action to ensure that digital assets entities cannot operate in the shadows outside of robust federal oversight and clear rules of the road. I look forward to holding this important hearing, and uncovering all that Congress must do to ensure this never happens again," she added. 

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Bankman-Fried, a resident of the Bahamas, is already under criminal investigation in that country and may face extradition to the U.S., according to Bloomberg. He is reportedly cooperating with Bahamanian authorities, who are in discussions with U.S. officials.  

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FTX was the third-largest crypto market in the world at the start of last week when it announced liquidity problems and said it would need a massive infusion of cash to stay afloat.

Binance, the world's largest crypto market, initially stepped in and offered to buy the company, but it backed out of the deal after looking into FTX's finances. 

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Reuters, citing two people familiar with the matter, reported that at least $1 billion of customer funds had disappeared and that Bankman-Fried had secretly transferred $10 billion of customer funds from FTX to his trading company, Alameda Research. 

Sen. Sherrod Brown, D-Ohio, called for Bankman-Fried to testify before Congress earlier this week and advocated for new regulations on cryptocurrencies.

FOX Business' Anders Hagstrom contributed to this report.