The lack of transparency regarding Securities and Exchange Commission (SEC) Chairman Gary Gensler's meeting with Sam Bankman-Fried of cryptocurrency exchange FTX, is contributing to feelings of "distrust" toward the federal government.
“This situation only fuels Americans’ distrust in their government," Pete McGinnis, Functional Government Initiative communications director, told Federal Newswire. "Ethics protocols are there to ensure government officials act within the law and avoid conflicts of interest. Refusing to share details only raises suspicion that there is reason for concern with the relationship between Gensler and FTX.”
A Freedom of Information Act (FOIA) request uncovered no evidence that Gensler obtained permission for a Zoom call with Bankman-Fried in March 2022, according to a previous report. That meeting raised questions about a potential conflict of interest. Financial experts told the New York Post if Gensler did not seek permission from the SEC's Office of the Ethics Counsel for the meeting, he would have violated SEC protocols.
Had Gensler sought permission to meet with Bankman-Fried, he would likely have been denied, according to the New York Post. An SEC spokesperson said Gensler had permission for the meeting but did not produce any evidence to support that claim.
One former SEC official told On the Money those requests usually happen via email.
“The reason you put it in an email is you want to get it in writing so you can cover your ass,” the official said. “What’s the point of doing it if it’s not in writing?”
Thomas Jones, president of the American Accountability Foundation, said the lack of evidence should raise “enormous red flags for investigators.”
"These types of special-access meetings are where some of the worst abuses in Washington happen and the American people need to know what happened in the lead-up to this meeting,” Jones said.
There could also be a potential conflict of interest with Mark Wetjen, who was working as an FTX lobbyist at the time the meeting took place, as he was responsible for setting up the meeting between Bankman-Fried and Gensler, the New York Post reported. Wetjen previously worked as a Commodity Futures Trading Commission commissioner while Gensler headed the agency, and the two have reportedly remained "close."
“The FTX case is one of the most significant financial frauds in decades,” Jones said. “FTX hired one of Gary Gensler’s closest allies to serve as their ‘lobbyist’ in Washington and then got an unprecedented direct meeting with Gensler to plead their case.”
Bankman-Fried, faces 13 criminal charges related to his misuse of FTX customers' funds, Federal Newswire reported. The crypto mogul is accused of using customer assets to make political donations, cover losses at his hedge fund Alameda Research, and buy real estate. The November 2022 collapse of FTX resulted in billions of missing funds owed to its creditors.
His trial is set to begin in October.
