'A prime example of what can go wrong': Krishnamoorthi seeks FTX documents for probe

U.S. Rep. Raja Krishnamoorthi, a Democrat from Schaumburg, is asking officials from a failed cryptocurrency exchange to turn over documents and other information related to the company's recent bankruptcy filing that could cost investors billions of dollars.

Krishnamoorthi, chair of the House subcommittee on economic and consumer policy, issued the requests to former FTX CEO Sam Bankman-Fried and current FTX CEO John Ray III, who was brought aboard just days ago after the company's collapse.

"Billions of dollars in investor money has vanished, and quite frankly, neither Mr. Bankman-Fried nor anyone at FTX can explain what happened to that money," Krishnamoorthi said by phone. "What you see with FTX is a prime example of what can go wrong when a company is not really following any kind of standard rules or regulations."

The subcommittee had already issued requests for documents from FTX executives in August as part of a federal probe "into what crypto exchanges and federal agencies are doing - and should be doing - to protect consumers and bringing stability to the industry," according to a news release.

Krishnamoorthi noted that Ray, who was put in charge of former energy giant Enron after its collapse nearly two decades ago, called the situation facing FTX "unprecedented."

Of the state of FTX when he took the helm, Ray said: "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."

FTX was once valued at as much as $32 billion, but only about $740 million in digital assets have been secured since the company's collapse.

Bankman-Fried is accused of using FTX funds to buy homes and other luxury items. He has not yet been charged criminally.

Krishnamoorthi's leadership of the subcommittee is coming to an end as Republicans will take control of the House in January. Still, the congressman is sure an investigation into cryptocurrency companies will continue under the new regime.

"I don't think my Republican colleagues are somehow in favor of people getting ripped off," he said. "There might be a concern about too many regulations going into place, but there's absolutely no reason why we can't come together and sort things out so that the right regulatory architecture is in place."

• The Associated Press contributed to this report.