Questions of Favoritism in the FTX Collapse

The FTX collapse has raised serious questions about potential favoritism from regulators influenced by political donations. Crypto lawyer John E Deaton highlights that Sam Bankman-Fried (SBF), the disgraced founder of FTX, allegedly donated $10 million to the Biden administration to gain special access to regulators.

This move reportedly helped SBF forge relationships with key officials, including those at the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

Coinbase Demands Answers on SEC Enforcement Spending

In parallel, SEC Chair Gary Gensler actively pursued enforcement actions against other cryptocurrency firms while maintaining multiple meetings with SBF. Consequently, calls for accountability are growing, with Coinbase leading the demand for transparency regarding the SEC’s enforcement spending.

> Here’s what we know: @SBF_FTX paid $10M to the Biden administration in order to “gain access to regulators” and man did it work. He met @CFTCbehnam and others at the CFTC more than once and was blown kisses 😘 from @RepMaxineWaters after SBF testi-lied about everything.… source
> — John E Deaton (@JohnEDeaton1) March 3, 2025

SBF’s Political Donations Opened Doors to Regulators

SBF’s contributions reportedly granted him repeated meetings with regulators, giving him an edge over other individuals in the crypto space. For instance, he met with CFTC Chair Rostin Behnam several times, raising questions about the possibility of FTX receiving preferential treatment.

Adding to this suspicion, House Representative Maxine Waters showed notable warmth towards SBF, increasing speculation regarding political favoritism. Reports indicate Gensler also met with SBF at least twice, with rumors of an impending agreement benefiting FTX.

Stolen Customer Funds May Have Fueled Donations

The legitimacy of SBF’s political donations comes under additional scrutiny due to reports that the funds might have originated from stolen FTX customer assets. If verified, this would imply that FTX customers unknowingly financed political contributions that may have shielded SBF from regulatory scrutiny while operating illegally.

Coinbase Seeks SEC Transparency Through FOIA Request

Now, Coinbase is demanding clarity on the SEC’s enforcement priorities under Gensler through a Freedom of Information Act (FOIA) request. This request seeks detailed records of investigations and lawsuits against crypto firms from April 2021 to January 2025, including insights into SEC employees, hours worked, compensation, and budget allocated for crypto enforcement.

Taxpayers Deserve Transparency, Says Coinbase CLO

Coinbase’s Chief Legal Officer, Paul Grewal, asserted that taxpayers demand transparency regarding the SEC’s actions.

The request signifies a growing call for accountability within regulatory practices, questioning whether the SEC’s stringent enforcement measures were politically motivated or genuinely aimed at safeguarding investors.

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