House Committee Threatens SEC Subpoena Over FTX Documents

Chairman of the United States House Financial Services Committee Patrick McHenry has hinted that he may attempt to subpoena the Securities and Exchange Commission (SEC) for documents about former FTX CEO Sam Bankman-Fried, or SBF.

McHenry alleged in a Sept. 27 oversight hearing that SEC chair Gary Gensler attempted to “choke off the digital asset ecosystem” and “refused to be transparent with Congress” regarding connections between the commission, FTX, and SBF.

Given SBF’s previously scheduled appearance before Congress, the committee head stated that the government body had “made multiple requests” for documents about the arrest’s timing.

“Seven months later, the committee has not received a single non-public document that was not part of a [Freedom of Information Act] production,” McHenry stated. As previously stated, our tolerance is wearing thin.

I do not wish to be the committee’s first chairman to issue a subpoena to the Securities and Exchange Commission.” In February, the committee leadership, headed by McHenry, requested the SEC provide documents about communications between its staff and the Justice Department concerning charges filed against Bankman-Fried.

McHenry resubmitted the request in April and May, alleging that the SEC had provided only publicly accessible information. While McHenry’s opening statement at the hearing centered on digital assets and oversight, ranking member Maxine Waters expressed concern over how a potential government closure could impact the SEC’s capabilities.

Gensler stated that if U.S. legislators were unable to reach a spending agreement by September 30, approximately 92–93% of SEC employees would be furloughed.

In response to McHenry’s inquiry, Gensler stated that Bitcoin was “not a security” because it failed the Howie test for what constitutes an investment contract.

In 2018, as a professor at the Massachusetts Institute of Technology, the chair of the SEC appeared to take the same position on Bitcoin as he did in his remarks as SEC chairman.