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November 27, 2022

Setting The Record Straight On Crypto, FTX, Sam Bankman-Fried, Jamie Dimon, The SEC And CFTC, and The Revolving Door

For years now, leaders on Wall Street and Washington looked the other way as the crypto industry worked to infiltrate our financial system and rewrite the rules to their benefit. Leaders that should have known better simply accepted the fairytale of crypto, and FTX founder Sam Bankman-Fried’s “vision.” They did so without doing the most basic due diligence or asking the most obvious questions if they thought it would make them rich.

The crypto industry followed the financial industry’s standard playbook of using all the levers of the influence industry to buy special treatment for its special interests at the expense of the public interest. Meanwhile, firms like FTX used a revolving door strategy of hires from the CFTC and elsewhere to use their knowledge, influence, and access at the agency and in Washington to move FTX’s agenda.

Better Markets has stood against the crypto wave and asked the tough questions. This includes voicing our opposition to FTX’s proposal to offer non-intermediated, margined clearing of Bitcoin futures products.

In the wake of FTX’s demise, the crypto industry argued FTX’s collapse showed new legislation and regulation was needed. This is not true. The current laws and rules are fully adequate to address the lawlessness going on in crypto. In fact, regulators at the banking agencies and the SEC withstood enormous political and industry pressure to allow crypto access into the core of the financial and banking system, which has helped prevent additional damage to the financial system.

It is true that FTX was registered and licensed by the CFTC, which failed to properly regulate the company. The CFTC has too often been a cheerleader for the crypto industry instead of using the regulatory powers they already have to enforce the existing laws. That must change.

Below are resources on the FTX collapse, crypto, Washington’s revolving door and the role of regulators.


Press Release: No One Should be Pushing FTX Endorsed Legislation Putting the Underfunded CFTC in Charge of the Crypto Industry Before Knowing the Facts (11/21/22)

Press Release: Watchdog Or Lapdog: The CFTC’s FTX Failures Must Be Investigated Given The Chair’s Push For Congress To Pass Crypto-Friendly Legislation Without Knowing The Facts (11/15/22)

Press Release: FTX Was Registered with and Licensed By The CFTC, Which Failed To Properly Regulate Or Supervise It And Its Innumerable Former CFTC Officials (11/14/22)

Fact Sheet: Setting the Record Straight on Crypto, FTX and Sam Bankman-Fried, Jamie Dimon, and Financial Regulators (11/13/22)

Press Release: FTX Must Immediately Withdraw Its Fatally Flawed Clearing Application Before The CFTC Because it is A Systemic Risk (11/8/22)

Better Markets Letter urging the CFTC to have a “transparent, robust, and meaningly inclusive” process for evaluating FTX’s application (6/16/22)

Fact Sheet: FTX’s Application Raises Serious Questions that the CFTC’s Trading and Clearing Roundtable Should Address (5/24/22)

Better Markets’ Comment Letter on FTX’s auto-liquidation proposal before the CFTC  (5/11/22)

Selected Additional Crypto Work

Comment Letter: Federal Agencies Must Address the Rampant Fraud and Extreme Volatility Of Digital Assets to Protect Consumers, Investors, Businesses, and Markets (8/9/22)

Press Release: Better Markets Applauds SEC Prioritizing Investor Protection in Rejecting a Crypto ETF Due to Susceptibility to Fraud and Manipulative Practices (6/30/22)

Press Release: Bipartisan Crypto Bill Is Congress Playing with Fire and Repeating the Mistakes of the Past- Another Financial Crash and More Industry Bailouts (6/7/22)

Press Release: Better Markets and Leading Consumer Groups Support Labor Department’s Call For “Extreme Care” For Cryptocurrency Retirement Plan Options (4/26/22)

Fact Sheet: Cryptocurrencies—The Next Big Thing or The Next Goldrush? (3/9/22)

Selected Media

Dennis Kelleher Discusses FTX and the Future of Crypto on CNN (11/16/22)

Washington Post: Sam Bankman-Fried’s crypto empire imploded after a Washington charm offensive (11/14/22)

“Critics are now calling for a pause in Washington in the wake of FTX’s collapse. ‘We don’t need more legislation. We need more money and support for regulators to go after what is fundamentally a lawless industry,’ said Dennis Kelleher, the president of Better Markets, which advocates for tougher financial regulation. ‘We need elected officials to prioritize the public interest rather than campaign contributors and lobbyists.”

Fortune: The fiction of crypto was visible to all who wanted to see’: One of DC’s top financial reform voices tears into the ‘greed’ and ‘FOMO’ that led to the FTX collapse (11/14/22)

“No one should be shocked by FTX’s demise,” Kelleher wrote in a scathing statement released on Sunday. “The fiction of crypto was visible to all who wanted to see.”

New York Times: Inside Sam Bankman-Fried’s Quest to Win Friends and Influence People (11/22/22)

“FTX blurred the lines between corporate affairs and political activity, and prompted concerns among some involved about whether the money was being spent effectively and in compliance with strict campaign finance laws, while leaving some potential beneficiaries feeling like there was a quid pro quo.

“It was relentless and all-encompassing,” said Dennis Kelleher, the president of Better Markets, a nonprofit that fights for more regulation of financial firms.”

Dennis Kelleher Discusses Crypto Lobbying on Financial Times’ Tech Tonic Podcast (9/14/22)

The Financial Times Tech Tonic podcast covers the crypto lobby’s enormous influence in its series “A sceptic’s guide to crypto.” They spoke with our Dennis Kelleher about the stunning amount of money being spent and how it could impact our entire financial system.

The Atlantic: The Crypto Meltdown Could Have Been So Much Worse (11/12/22)

“Why is the contagion so limited? I asked that question of Dennis Kelleher, a co-founder of Better Markets, a nonprofit that advocates for financial regulation in the public interest. “The only reason we do not currently have a financial crisis, with a crash and with bailouts, is because regulators have withstood enormous pressure to allow interconnection and linkages between the crypto activities and the core of the financial and banking system.”

LA Times: A young crypto billionaire’s political agenda goes well beyond pandemic preparedness (8/12/22)

The FTX proposal would encourage speculation, rather than finding stable prices, said Dennis Kelleher, president of Better Markets, a D.C.-based think tank that focuses on accountability, transparency and fairness in financial markets. The proposal “removes a historic layer of protection that has worked extremely well,” Kelleher said. “The markets are going to be transformed in a way that the interests of actual producers and purchasers are going to end up subordinated to speculators and financial products.”

Dennis Kelleher Takes Part in Brookings Panel on Crypto (11/15/22)

During the panel, Dennis focused on the revolving door of the crypto industry and the need to prevent the lawless crypto industry from infecting the entire banking system and economy.

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