Illustration: The Verge
The Federal Trade Commission is investigating multiple crypto companies over allegations of deceptive conduct, as first reported by Bloomberg on Monday.
“While we can’t comment on current events in the crypto markets or the details of any ongoing investigations, we are investigating several firms for possible misconduct concerning digital assets,” an FTC spokesperson said in a statement to The Verge Tuesday. “We cannot comment on the nature of the investigations.”
On top of several civil suits, the FTC is just the latest US agency to probe the crypto industry following the sudden implosion of popular trading exchange FTX last month. The Justice Department, Securities and Exchange Commission, the Commodities Future Trading Commission, and two state attorneys general have all reportedly launched investigations into FTX and its executives over the last few weeks.
The FTC declined to identify the firms currently under investigation or the nature of the probes. But the agency could use its authority to enforce truth in advertising rules to rein in the industry. Last month, an FTX customer sued founder Sam Bankman-Fried, along with a handful of celebrity endorsers like Tom Brady, for allegedly recruiting consumers to invest in a Ponzi scheme.
The House Financial Services Committee, chaired by Rep. Maxine Waters (D-CA), is scheduled to hold a hearing next week on the fallout of the FTX collapse. On Sunday, Bankman-Fried promised to testify before the committee but did not commit to joining them for the December 13th hearing.
“Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” Bankman-Fried said. “I’m not sure that will happen by the 13th. But when it does, I will testify.”
Waters replied to Bankman-Fried Monday, writing, “Based on your role as CEO and your media interviews over the past few weeks, it’s clear to us that the information you have thus far is sufficient for testimony.”
As of publication, neither the committee nor Bankman-Fried has confirmed whether the FTX founder will attend the hearing next week.