FTX, SBF & Congress: Craziest Crypto Hearing EVER!!

Last week the new FTX CEO John J Ray III Testified to U.S politicians about the Collapse of the cryptocurrency exchange And its sister company and trading firm Alameda research FTX and Alameda founder Sam bankman freed was also supposed to Testify but was conveniently arrested Less than 24 hours before he was due to Speak even so the hearing revealed many Things so today I'm going to summarize What was said at the FTX hearing tell You how much money was lost when users Could get their cash and crypto back and What this could all mean for the crypto Market I want to start with a quick bit of Background there were technically two Hearings about the collapse of FTX and Alameda research last week The first hearing was hosted by the U.S Senate Banking Committee this was the Hearing where multi-millionaire and FTX Apologist Kevin O'Leary answered Questions Sam was supposed to speak before the Committee too but seemingly decided not To show up at the last minute now given That Sam had been speaking to just about Everyone Under the Sun in the days prior U.S politicians were understandably Irked by this Sam was coincidentally Arrested a few hours later more about That a bit later on what's annoying About Sam's arrest is that it meant he

Couldn't appear for the second hearing Hosted by the U.S House committee on Financial Services the very next day Not surprisingly this committee is Headed by a politician who had close Ties to Sam and who initially went easy On him after the FTX Fiasco for added Entertainment then I'll point out which Members of the House committee are known To have received donations from Sam as We go along spoiler alert the list is Quite long and it includes politicians On both sides of the aisle but the Breakdown isn't exactly 50 50 if you Catch my drift as always I'll leave a Link to the full Hearing in the Description if you're interested it's Titled quote investigating the collapse Of FTX part one and I will caution that It's almost four hours long That said it is worth a listen if you Get the chance because it's unlike any Crypto hearing we've ever covered before I'll also quickly note that Sam leaked His testimony to Forbes while the Hearing was taking place unfortunately I Don't have the time to go into detail in This video but I'll likely do another Video summarizing Sam's testimony in the Coming days because it's pretty shocking The FTX Alameda saga continues Now the FTX hearing began as all Hearings do and that's with opening Statements from politicians from both

Sides of the aisle as well as the one And only witness John J Ray III for Those unfamiliar John is famous for Specializing in restructuring bankrupt Companies and recovering their assets Notably Enron on that note some people In the crypto Community were arguing That Jon didn't exist because there were Almost no pictures of him which didn't Make sense given his status Some mainstream media Outlets also Mistakenly used images of other John J Rays in their FTX reporting typical In any case the first to speak was Committee chairwoman Maxine Waters she Said it was unfortunate that Sam's Arrest meant he couldn't testify talked About how FTX is just one of many crypto Companies that has gone under in recent Months and actually applauded the SEC For bringing charges against Sam now This is hilarious because the SEC was Allegedly complicit in FTX and alameda's Operations there have consequently been Many calls from politicians and from the Crypto industry for people to Investigate But nothing so far the SEC also didn't Raise charges against Sam until last Monday you can find out what the SEC is Alleging Sam did and what other charges He's facing from other U.S authorities By using the link in the description Now second to speak was the ranking

Member AKA second in command from the Other side of the aisle Patrick McHenry To my understanding Patrick will become The chairman of the house Committee in The new year and he's already asking the Treasury Department to postpone its Crypto tax plans and you can learn more About the global crypto tax Plans by Using the link down there all sorts down There today isn't there anyway Patrick Celebrated Sam's arrest but said The More important thing is to know exactly What happened to FTX and Alameda he also Stressed the need to separate Cryptocurrency as a technology from Centralized crypto companies and blamed SEC chairman Gary Gensler for his lack Of oversight based Patrick Next it was John's turn to take the Stand he talked about how he is focused On recovering customer funds how FTX and Alameda's collapse was ultimately due to Extreme centralization of decision Making and that the new team is trying To understand exactly what happened John also revealed that there's missing Information about over 500 Investments Made by FTX and Alameda that they have Dozens of terabytes of data and billions Of transactions to review and that he Can't answer every question because the New team is still trying to understand What happened After John's opening statement the

Question period began I'll stick to the Most important and entertaining Questions just for the sake of time so The first politician to ask questions Was again Maxine and she asked John About the relationship between FTX and Alameda John said that they were Essentially one and the same with Sam Being in total control and having zero Risk management the second politician to Ask questions was again Patrick and he Asked John when FTX and Alameda were First in trouble John said the 2nd of November is when they were publicly in Trouble but cautioned that it's possible FTX and Alameda were already facing Financial issues for months if not years Before that this is significant because The 2nd of November is when coindesk Published an article about FTX and Alameda's assets if you watched our Video about how FTX and Alameda Collapsed you'll know that this seems to Have been the Tipping Point something That Sam has also since admitted in Interviews So the third politician to ask questions Was Nadia Velasquez and she asked John About how many assets his team have Managed to recover so far John revealed That they've recovered over one billion Dollars so far mostly in cryptocurrency He also said it will take weeks if not Months to recover the rest

The fourth questioner was Anne Wagner And she asked John about whether it's True that Alameda lost 10 billion Dollars of assets belonging to FTX users John admitted that they're not 100 sure Yet but the figure seems to be in that Range specifically above 8 billion Dollars The fifth questioner was Brad Sherman And if you've seen any of our other Crypto hearing summaries you'll know That he's one of the most anti-crypto Politicians in the whole United States Case in point he actually started his Question period by pointing out that He's ranked as the most anti-crypto Politician Brad then said that Sam wasn't a single Snake in the garden of crypto but that The garden of crypto consists entirely Of snakes He attacked crypto for daring to compete With the US dollar and said its only Purpose is to be used in illicit Activity especially tax evasion he even Said it only enriches billionaires Funnily enough Brad also instructed his Fellow politicians not to pass the Crypto regulations proposed by Sam this Is ironic because the crypto regulations Proposed by Sam were actually Anti-crypto Now Brad finished his tirade by telling The SEC to go after other crypto

Companies and crack down on the whole Industry Brad then asked John a Surprising question and that's whether He and his team would be able to provide Information about the donations Sam made To U.S politicians this is surprising Because most of Sam's donations went to Brad's close colleagues Brad will be in For a surprise because John said yes That Brad is what happens when you don't Dyor Anyway the sixth politician to ask Questions was Frank Lucas and he asked John why some of ftx's subsidiaries Weren't put into bankruptcy such as Ledger X John explained that any FTX subsidiaries That were not put into bankruptcy are Fully solvent and will be sold it looks Like Goldman Sachs has telegraphed its Interest in buying The seventh questioner was Al Green and He took it to the river by asking John Whether he thinks Sam's claims of Incompetence are true given his Credentials and experience what's odd is That John reserved judgment about Sam Al finished by calling for his Colleagues to send a message to others Like Sam in other words set an example By destroying him The eighth to go was Pete Sessions and He asked John about the sec's knowledge Of FTX and alameda's operations Jon

Seemed to dance around most of these Questions though he did say that he will Provide any documents that Pete is Looking for related to unpaid taxes Speaking of which the potential for Unpaid taxes was a Hot Topic among all The politicians I suspect the U.S Government is short on funding these Days anyways the ninth questioner was Emmanuel Cleaver and he asked John if he Had read Sam's aforementioned testimony And whether cryptocurrency should be Renamed to creepy doe currency yes Seriously John said no to the former and said it Was up to U.S politicians to decide the Latter cringe No doubt wondering how he could possibly Follow that next up was Blaine Lueckameyer and he asked John about Farmington State Bank the small bank With connections to tether that FTX and Alameda had invested in John said they were still looking into It and acknowledged there might have Been some money laundering now for Context the chairman of Farmington State Bank is also the chairman of Del Tech Bank in the Bahamas which provides Banking services for Teva FTX and Alameda invested over 11 million dollars In the bank significantly more than it Was worth for just a 10 stake really Gets the Noggin jogging

Now the 11th politician to ask questions Was Ed perlmata and he pointed out that Victims of the 2009 Bernie Madoff Ponzi Scheme only got their payouts in September this year Ed asked how long it will take for FTX Users to get their assets back and John Said he doesn't know more on that in a Bit Next up was Bill huizenga and he asked John about whether it was true that Around two percent of ftx.com users were Based in the US John admitted that this Was true which is interesting given that Jon seemed to claim ftx.com only had International users earlier on in the Hearing it's not clear how this was Possible given that U.S users were not Allowed to create accounts on the International version of FTX this may be Additional evidence that something Seriously Shady was going on at the Exchange Bill also asked John about the Commingling of customer funds between Ftx.com ftxus and Alameda research John said it looks like only user funds From ftx.com were being commingled with Alameda but they can't say for sure Because ftx.com and FTX the US's assets Were being kept together yikes Bill made it a hat-trick with his third Question and that was whether Sam's Parents were involved John confirmed

That Sam was receiving legal counsel From his dad and both of his parents Were being paid by FTX and Alameda Bill then dropped the bombshell that he Met with Sam in 2021 and his dad was There the plot thickens Now at the 13th politician to ask Questions was Joyce Beatty and she asked John about how many users FTX had John Confirmed that ftxus had around 1 Million accounts as previously reported And revealed that ftx.com had 7.6 Million accounts but cautioned that Users may have had multiple accounts Note that Joyce received money from Sam Fourteenth to go was Andy Barr and he Asked John about how it was possible That FTX had a higher ESG rating than Some publicly traded companies John Didn't have an answer and just said that He would ask for his money back from Whoever made that assessment shots fired At BlackRock more about blackrock's Crumbling ESG Empire in the description Moving on Next up was Juan Vargas and he started By saying that he doesn't see the point Of crypto and that crypto companies must Register with the SEC or else Juan went On to ask pointless questions while Saying that he doesn't understand crypto And that only terrorists use it I wonder What the folks fighting in Ukraine would Have to say about that now the 16th

Politician to ask questions was Roger Williams and he asked John whether Sam Should play any role in FTX and Alameda's bankruptcy John smirked and Said that Sam should play the role he's Playing now I.E sitting in prison and Not being involved at all more about That in a bit too The next questioner was Michael San Nicholas and he asked John why exactly FTX collapsed John reiterated that They're still trying to understand Exactly what happened but it looks like FTX and Alameda just lost customer funds Trading and investing in things that no Longer have value The 18th politician to ask questions was French hill and he asked John about the Two firms that audited FTX and Alameda For reference one of these auditing Firms had offices in the metaverse John said that he doesn't trust what Either of these orders has had to say Which is understandable 19th was Jim Himes and he asked John Whether all the prominent VCS and asset Managers did any due diligence on FTX John said he didn't know but admitted he Surprised they invested that really says A lot given that one of the investors Was BlackRock dyor guys better yet Always keep your crypto in a personal Wallet and if you're looking to get a Discount on a hardware wallet you can

Check out my deals page using the link In the description Oh and by the way Jim received money From an FTX executive Now the 20th politician to go was Tom Emma who's been in the crypto headlines For aggressively pursuing the sec's role In FTX and alameda's collapse He started by revealing that Sam met With Gary Gensler more than with any Other regulator and that they were Actively discussing crypto regulation Note that Tom received money from FTX Tom then asked John whether he could Provide the committee with all the Documents related to the SEC at FTX to Which John said yes Tom spent the rest of his time Reiterating that ftx's collapse was due To centralization and opacity of a Company not the decentralization and Transparency of cryptocurrency Next to ask questions was Sean Caston And he asked John about Sam's interview With crypto journalist Tiffany Fong Which revealed that eight people were Involved in the FTX hack following its Bankruptcy Sean asked John whether he Had spoken with Sam about this and John Said no this is actually kind of Concerning as insufferable as Sam is There's no question that he has access To valuable information that would help FTX users get their assets back

This begs the question of why John Apparently isn't communicating with Sam At all the answer will be revealed a Little later next to ask questions was Lee zeldin and he asked John about the Assets that Alameda has John explained That they're digging through hundreds of Bank accounts wallet addresses and Physical wallets John also warned that some assets may Have been hidden by Sam and Company note That Lee also received money from FTX Co-ceo Ryan salame who reportedly ratted Sam out Now the 23rd politician to ask questions Was Gregory Meeks and he asked John Whether there was any sanctions of Asian John said they are examining whether any Sanctions of Asian took place Now as a fun fact Ernst young is digging through FTX Financials so let's hope they don't Destroy any documents like the SEC did When investigating the 2008 financial Crisis Now conspiracies aside the 24th Politician to ask questions was Barry Loudermilk and he asked John whether Sam's claims about FTX us being solvent Are true John said it's too soon to say For sure because they haven't found all The wallets yet Barry also asked John about the Withdrawals allowed to FTX users in the

Bahamas shortly after withdrawals were Paused for everyone else John confirmed that 1500 Bahamian FTX Users were able to withdraw 100 million Dollars of crypto and cash shortly Before the bankruptcy truly Wild Now the 25th politician to go was Josh Gottheimer and he started by saying that This situation is the sec's fault Because it didn't provide clear crypto Regulations Josh then asked John about whether Sam's Claims that everyone will be made whole Are true and John basically said no note That Josh received money from Sam Number 26 to go was Warren Davidson and He asked John whether FTX ever had Enough crypto on hand to honor customer Withdrawals John explained that FTX Always had a small float of crypto Holdings and collapsed because of a big Bank Run 27th was Ayanna Presley and she asked John how much his team will be able to Recover for FTX users John said they're Not sure yet but each day they're Becoming more confident as they continue To find more information I really do Hope they ask Sam for info The 28th politician to ask questions man There were a lot of them weren't there Was Ted Budd he asked John about whether Things would have been different if FTX And Alameda had been based in the USA

John said probably not Ted went on to say that bad crypto Regulation pushed both companies Offshore note that Ted also received Money from FTX co-ceo Ryan salame the 29th politician to go was Richie Torres And he asked John a bunch of questions About Sam John said that Sam should have Known that what he was doing would end The way it did and he also said he Doesn't care at all about what Sam says Or thinks again probably not the best Approach note that Richie also received Money from Sam The 30th politician to ask questions was Anthony Gonzalez and he asked John Whether Sam and the other higher-ups Knew about the back door software to Access FTX user funds John said that They must have known Anthony also asked whether FTX was Solvent before binance's ftt tweet and John said no if that wasn't crazy enough Anthony asked John what his quote Spidey Senses are saying about the transfers to Bahamian accounts shortly before FTX Went bankrupt John said that it's Extremely suspicious and they will Follow that money 31st to go was Rashida Talib and she Asked John how much money FTX spent on Sports sponsorships John said they don't Know Rashida went on to ramble about how Cryptocurrency is not the solution to

Financial inclusion no surprises there Now the 32nd politician to ask questions Was John Rose and he slammed the SEC for Waiting until the day before to file Charges against Sam he then claimed that Alameda holds 30 billion dollars of the Usdt stablecoin and asked John whether All this usdt would be sold as part of The bankruptcy if you watched our video About the tether papers you'll know that Alameda was given almost half of all the Usdt Ever issued by tether I suspect This is where John the politician is Getting his figure from and it's not Exactly up to date or accurate even so John Ray answered by saying they're Still looking into it this makes me Wonder how much usdt Alameda currently Holds I couldn't seem to find a figure Anyhow next up was Alma Adams and she Asked John when exactly FTX users will Get their money back John repeated that It's not currently clear and you'll Recall that he said it will take weeks If not months just to recover the assets Brian stale was next and his line of Questioning was probably the most Intense that's because he asked John About the FTX hack following the Bankruptcy and John revealed that there Was both a hack and a transfer of crypto To Bahamian authorities two events John Also revealed that the transfer to Bahamian authorities was done with the

Help of former FTX employees including Sam Brian asked John why the Bahamas did That and John said they have no idea Because Bahamian authorities have Refused to give them any meaningful Information about the transfer Brian Then asked another intense question and That's whether Sam could have been Working with Bahamian authorities to Change the jurisdiction of the Bankruptcy process by transferring funds John suspects this is true and he added That the Bahamas bankruptcy process is Not transparent at all if this isn't Evidence that Sam was involved in some Next Level well then I don't know What is now the 35th politician to Question John was Stephen Lynch and he Asked what the impact on FTX users in The U.S will be John explained that the Impact should be minimal given that it Appears no kryptos from FTX us ended up In alameda's Pocket despite being kept With ftx.com kryptos 36th up was Madeleine Dean and she brought the Intensity back by asking John about the New tokens the Bahamian authorities Asked Sam to Mint and transfer to them After FTX filed for bankruptcy John Confirmed that this happened and said That the value of the tokens minted was 300 million dollars but it's not clear Whether this mint and transfer was Completed

If that wasn't mysterious enough John Also revealed that so far there is no Concrete evidence that FTX was even Hacked at all John even thinks that Sam And the other FTX execs could have Transferred those supposed hacked funds To their own cold wallets Now next to ask questions was Alexandria Ocasio-cortez and she took the intensity To a whole other level I honestly Suggest watching her exchange with John If you have the time it's at around 3 Hours and 20 minutes into the hearing AOC went through a detailed timeline of Everything that happened from the moment FTX paused withdrawals to the moment Sam Was arrested she revealed that the Bahamian authorities had filed some sort Of bankruptcy document on the 16th of November in the United States to get Jurisdiction now this flew over my head Somewhat but the main takeaway is that It suggests that yes the Bahamas was Trying to take over the bankruptcy Proceeding somehow Alexandra then Explained that all this information was Only revealed when John filed documents With the courts the day before she Explained that this information due to Its nature would have been made known to Sam as a defendant and likely to Bahamian authorities since the court Filings were public John confirmed all Of this and confirmed to Alexandria that

He had filed these documents around 4pm A few hours before Sam was taken into Custody by Bahamian authorities Alexandra then held up the documents Announcing Sam's arrest and pointed out A minor detail that everyone seems to Have missed the Bahamian authorities did Not specify when the extradition request Had been made by the U.S in fact the Wording is so vague that it's not clear If the U.S had even asked the Bahamian Authorities to arrest Sam so he could be Extradited to the United States in short They arrested him voluntarily now if you Don't understand the significance of This it arguably confirms that Sam was Working with the Bahamian government on Something big that it doesn't want the U.S government to know about it looks Like the Bahamian authorities arrested Him so he wouldn't speak at the hearing Or to anyone else Now after that bombshell came Silvia Garcia and she asked John to clarify Whether the time it will take for FTX Users to get their assets back will be The same for both International and U.S Users John confirmed that this is the Case Ouch next came William Simmons and he Spent most of his time speculating Whether the real reason Bahamian Authorities had arrested Sam so he Couldn't testify was not because of

Something they had done but because of Something U.S politicians had done in The Bahamas if you watched our Aforementioned video about the charges Against Sam you'll know that the Southern district of New York had issued A sealed indictment the day before Sam's Testimony it's believed that this Indictment is why Sam was arrested in The Bahamas hence William's speculations Anywho the 40th politician to ask Questions was Jesus Garcia and he spent Most of his time trashing the crypto Industry he said that FTX is not a One-off and the entire crypto industry Is corrupt he proceeded to list the Usual names like tether and Terror Before saying crypto has no inherent Value Believe it or not but Jesus also Received money from Sam The 41st politician to ask questions was Jake ockenkloss he asked John why he Won't speak to Sam John explained that He doesn't want anyone in his team to Talk to him and claims that Sam is Trying to trick them into letting him Access their internal systems Jake also Asked John whether all FTX users will be Made whole John responded with one word Impossible Jake went on to acknowledge How convenient it is that Sam was Arrested the day before and asked John To provide the committee with any

Documents about Shady stuff with the Bahamas note that Jake received money From Sam now the 42nd and thank God Final politician to ask questions was Lance Gooden He asked John whether FTX and Alameda Co-founders have access to other Cryptocurrency wallets and whether Sam's Parents were working for other crypto Companies John admitted that he doesn't Know on both accounts and with that the Hearing was over and Maxine and Patrick Made some closing statements the only Thing worth mentioning here is that part Two of the investigation will take place Sometime next year maybe next time Sam Will be present given that he isn't Fighting his extradition anymore and Assuming he isn't sitting in a U.S jail Cell after that And so now for the big question what the Hell does this all mean for the crypto Market well it's clear that the FTX Alameda rabbit hole gets Deeper by the Day both companies were clearly involved With some shady stuff in the Bahamas and Possibly the United States it's also Possible that FTX and Alameda were Involved in some shady stuff involving Other crypto companies but I have a Feeling it will be months before we find That out in the meantime crypto will be Under extreme scrutiny from Regulators Around the world the Silver Lining is

That the collapse of FTX and Alameda has Put the heat on the SEC Politicians from both parties were Visibly upset with Gary Gensler for not Setting clear crypto regulations It's going to be interesting to see what He has to say for himself after meeting With Sam so many times with a bit of Luck Gary will get the boot and he will Be replaced by a pro crypto commissioner Who will finally set some reasonable Crypto regulations This could incentivize crypto companies To set up shop within the United States Instead of Caribbean tax Havens now the Last thought I'll leave you with is Something new that I've never seen in Other hearings about cryptocurrency A few politicians seem to be genuinely Concerned that cryptocurrency could be a Competitor to the US dollar and not just Anti-crypto Brad Sherman This is fairly unprecedented because It's a tacit admission that crypto could In fact grow large enough to become such A threat it underscores the idea that We're in the then they fight you phase Of crypto adoption the next phase is Cryptocurrency winning but it's going to Take a few years probably longer well as The old ad slogan goes good things come To those who wait let's hope that's true