SBF shilled FTX risk model to FDIC Chairman Gruenberg prior to collapse

Before crypto exchange FTX and its founder Sam Bankman-Fried (SBF) were mired in allegations of misappropriation of users’ funds, SBF was among the most influential crypto-entrepreneurs. Before FTX collapsed, a leaked email exchange with a top regulator allegedly revealed SBF’s intention to have the exchange federally regulated.

On May 28, 2022, nearly six months before FTX filed for bankruptcy and SBF resigned as CEO, Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg received an invitation to meet with SBF on June 13, 2022, the Washington Examiner reported. The email was relayed by former CFTC Commissioner Mark Wetjen, who joined FTX US as head of policy and regulatory strategy in November 2021.

Sam Bankman-Fried’s meeting invitation to FDIC Chairman Martin Gruenberg. Source: The Washington Examiner

In the latter half of the email, Wetjen told Gruenberg that FTX is in the “unusual position of asking the federal government to regulate us.” He further added:

“We have an application to the CFTC that sets out for the agency how to do it. All the CFTC has to do is approve it. Once the CFTC does that, the others will follow — the other major US exchanges have the CFTC as well – licenses.”

In response to SBF’s request, Gruenberg agreed to meet with the duo, as shown in the leaked email below.

FDIC Chairman Martin Gruenberg accepts Sam Bankman-Fried’s meeting invitation. Source: The Washington Examiner

After the collapse of FTX, SBF’s political ties were exposed during parallel investigations. An FDIC spokesman confirmed that the FDIC chairman met with SBF as part of “routine courtesy visits with leaders of financial firms and institutions.”

Related: Sam Bankman-Fried proposes revised bailout package ‘next week at the latest’

Along with federal investigations, FTX’s new management began conducting internal investigations to trace missing funds.

Recent court documents revealed that SBF and five other former FTX and Alameda Research executives received $3.2 billion in payments and loans from FTX-affiliated entities. SBF reportedly received the lion’s share of the funds, receiving $2.2 billion.

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