RUGGED

SBF Was to Testify He Was Strong-Armed Into Naming New FTX CEO: Report

After he acquiesced to naming John J. Ray III as the exchange’s next chief executive, Bankman-Fried reportedly received a lucrative “potential funding offer.”

Sam Bankman-Fried will no longer testify before the U.S. House Committee on Financial Services this week, having been arrested in the Bahamas after U.S. prosecutors filed charges against the disgraced 30-year-old crypto kingpin. But Bankman-Fried had been planning to testify about the process of naming attorney John J. Ray III as his crypto exchange’s chief executive after it filed for bankruptcy in November, according to Reuters. In a draft of his testimony to Congress seen by the news agency, Bankman-Fried claimed he was pressured into naming Ray the CEO of FTX by lawyers for Sullivan and Cromwell, a firm advising him at the time. After he agreed to elevate Ray, Bankman-Fried reportedly wrote, he was given a “potential funding offer for billions of dollars to help make customers whole” from another source, unidentified by Reuters. But by then it was too late to rescind Ray’s nomination. Rep. Maxine Waters (D-CA) confirmed in a Monday statement that the House committee would hear from Ray on Tuesday. It was earlier reported that Ray plans to testify about the “utter failure” he discovered at FTX after taking over, including its “unacceptable management practices.”