Members of the US House of Representatives had sent a letter on February 10th to Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC).
Republicans Bill Huizenga from Michigan and North Carolina’s Patrick McHenry demanded answers about the arrest of Sam Bankman Fried, the co-founder of the FTX exchange before he was scheduled to testify before the House Financial Services Committee.
The two lawmakers said that the timing of the arrest gave rise to questions about the cooperation of the SEC with the Justice Department and their process.
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The chairman of the Oversight Committee, Bill Huizenga, and the chairman of the House Financial Service Committee, Patrick McHenry appear to be investigating the SEC.
This comes after the regulatory agency launched a crackdown against the crypto-staking services offered by the Kraken exchange in the United States.
The two representatives said that they were looking into the timing of the action that the Department of Justice (DOJ) and the SEC had taken against Bankman-Fried.
In order to do so, they sent a letter to the SEC boss and asked for communications and records between the DOJ, the enforcement agency of the SEC, and the Office of the Chair.
The representatives’ demands
The letter said that the Division of Enforcement of the regulatory agency claimed to have fully investigated SBF’s actions and presented its findings for review to the Commission in order to authorize its charges.
However, they said that it was the timing that raised questions and people needed them to be transparent about everything.
The letter has asked for all communications and records between the employees of the SEC’s enforcement division relating to charges filed against Bankman-Fried.
They have also demanded that all communications and records between the DOJ and the SEC also be shared.
The third demand is for communications and records between the SEC chairman and employees of the Office of the Chair relating to the charges and subsequent arrest of Sam Bankman-Fried.
It should be noted that the House Republicans do not want to waste time and have demanded that the documents be provided as soon as possible.
As a matter of fact, they have also issued a deadline for the Securities and Exchange Commission (SEC), as the letter said that the documents should be provided by February 23rd, 2023.
The letter from Huizenga and McHenry also added that the House Committee on Financial Services does have the authority of overseeing the activities of the securities regulator.
They said that under the Rules of the House of Representatives, Rule X gives them jurisdiction over these activities.
This does not come as a surprise because there has been a significant amount of criticism against the actions, or lack thereof, of the SEC in terms of crypto regulation.
It has intensified in the wake of the FTX collapse, especially as the activities of Sam Bankman-Fried and the crypto exchange have come to light.