Gensler's Meeting With Sam Bankman-Fried and FTX
Following the announcement that cryptocurrency exchange FTX would be filing for bankruptcy, rumors began to circulate that the chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, was involved in providing "legal loopholes to obtain regulatory monopoly" for former FTX CEO Sam Bankman-Fried and his now-defunct exchange. Some people have even hypothesized that the head of the SEC was getting ready to send a no-action letter to FTX.

The meeting with Bankman-Fried is recorded on Gensler's own calendar as having taken place in March. A note from a meeting of the Securities and Exchange Commission (SEC) states that "members of the staff of Chair Gensler met with staff of IEX and FTX to discuss custody of digital asset securities by special purpose broker-dealers, including the unique risks associated with custody of digital asset securities and the conditional no-action relief discussed in the statement." This meeting took place in order to discuss "the unique risks associated with custody of digital asset securities and the conditional no-action relief discussed in the statement."

On the other hand, Charles Gasparino of Fox Business revealed on Saturday via Twitter that "contrary to conjecture," Gensler is not planning to offer former FTX CEO Sam Bankman-Fried a regulatory monopoly on a cryptocurrency exchange. He said this.

An individual who was there during the March discussion between the two parties described it as a "45 minute lecture by Gensler" on what he wants from a cryptocurrency exchange.

The writer pointed out that not only did the chairman of the SEC not make any commitments to Bankman-Fried, FTX, and IEX, but he also "forced them to submit considerably more in the way of disclosure etc. to the SEC about their model."

"Follow-up discussions with the SEC continued up until almost the moment FTX imploded, but no SEC permission was communicated," he wrote. "[T]here was no indication that the SEC would grant approval." "Given Bankman-Democratic Fried's political leanings, the House GOP, which is set to hold hearings on FTX and intends to summon Gensler as a witness, may want to reconsider their plans. According to several sources, Gensler communicated to Brad Katsuyama and Bankman-Fried that he desired stringent control and standards, and that there was no guarantee that the project would be approved.

Despite this, a significant number of people have expressed their opinion on various social media platforms that Gensler or other SEC staff members were assisting FTX. Some people had the suspicion that it was due to the fact that Bankman-Fried is a significant financial contributor to the Democratic Party. According to the political contributor data compiled by Open Secrets, the former head of FTX was the second highest donor to the Democrats in the election cycle of 2021-22, contributing 39.8 million dollars. George Soros was the top donor in this category.

Edward Snowden, a privacy campaigner and whistleblower, made the following tweet in reference to the sanctioning of the Ethereum cryptocurrency mixing service Tornado Cash:

While so-called regulators were discreetly making friends with the criminals who had just stolen from 5 million people, the White House was issuing fines and arrest warrants on children for the 'crime' of developing privacy tools to protect you. What's the big deal? The perpetrators were major political contributors.

Thursday, Republican Representative Tom Emmer of Minnesota sent out the following tweet: "Reports to my office claim that he was assisting SBF and FTX work on legal loopholes to establish a regulatory monopoly. We are looking into this at the moment.

During an interview that took place last week on CNBC, Gensler stated that he had, in fact, met with Bankman-Fried. "I think we've been clear in these discussions," the chairman of the SEC said at one point. The public will suffer as a result of noncompliance, which is not going to be effective.

It is common practice to criticize the chairman of the SEC for his enforcement-centric approach to the regulation of the cryptocurrency business. Gensler has made it clear that he believes cryptocurrency trading and lending platforms should "come in," have conversations with the SEC, and get registered. On the other hand, the CEO of Ripple, Brad Garlinghouse, stated in September of the preceding year that the SEC was using their meetings with companies to generate leads for their enforcement actions rather than working with the cryptocurrency industry. The sale of XRP is the subject of the continuing legal dispute that his company is currently involved in with the SEC.

In addition, a number of different news organizations have stated that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are conducting an investigation into FTX for the possible misuse of customer cash. In May, Gensler issued a warning about the practice of cryptocurrency exchanges trading against their customers.

Do you believe that the Securities and Exchange Commission (SEC) and Chair Gensler were working on legal loopholes with the cryptocurrency exchange FTX and Sam Bankman-Fried? Share your thoughts with us in the section below titled "Comments."