Paul Atkins, the SEC chair candidate nominated by Trump, has raised concerns about potential conflicts of interest due to his previous consulting work for FTX, casting doubt on the regulatory confidence of the Trump era.
The U.S. Senate recently began deliberations on the new SEC chair, but the nominee Atkins' past interactions with the bankrupt cryptocurrency exchange FTX have sparked controversy. Atkins previously served as an SEC commissioner during the Bush administration and after leaving, established the "Patomak Global Partners" consulting firm, providing regulatory compliance services for many crypto-related enterprises, with FTX being one of its clients.
Senator Warren: Conflict of Interest Unsuitable for SEC Chair
According to public information, Atkins' company assisted FTX with regulatory and legal compliance matters between 2021 and 2022, and was even listed as a creditor in FTX's bankruptcy case last year, which has raised questions about his impartiality.
Senator Elizabeth Warren sent a 34-page inquiry to Atkins, demanding he disclose detailed collaboration details with FTX, particularly the consulting fees received and the services provided. Warren emphasized that the SEC chair must ensure market fairness and protect investor interests, and if Atkins cannot clearly explain his connections with FTX, it will inevitably raise public doubts about the regulatory body.
The FTX bankruptcy caused losses for over 1 million investors, and the associated regulatory consultants might become future market regulators. Such conflicts of interest will severely erode the independence and credibility of regulatory institutions.
How to Divest with SBF?
Due to the significant losses caused by FTX to crypto investors, Senator Warren questioned Atkins about whether his previous advice to FTX involved criminal consultations such as tax evasion or money laundering, and whether he was already aware of the FTX case's internal details.
It is understood that FTX collaborated with Patomak Global Partners in 2022, which was the golden year of LUNA's collapse, Three Arrows Capital's bankruptcy, and FTX's downfall. Therefore, the main inquiry in the letter focused on whether the consulting firm provided legal advice and helped investors avoid losses in compliance with U.S. securities laws:
Your deep collaboration with FTX and crypto clients raises concerns about your ability to impartially participate in SEC regulation. The FTX case also makes people suspicious of your prior understanding of the situation. Could you have prevented FTX from causing losses to investment clients?
Collaborating with Justin Sun and Trump Coin to 'Harvest Leeks'?
Besides the FTX case, Warren pointed out that the meme coin TRUMP was launched just days before Trump took office, and the SEC immediately stated that the meme coin was "not a security". The subsequent crash of Trump Coin also sparked market criticism, and Warren questioned in her letter whether Atkins' team had discussed these actions with the Trump family.
Additionally, Justin Sun, the founder of Tron who was previously targeted by the SEC, was monitored for token sales by the Tron Foundation in March 2023. In November last year, he transformed into an advisor for the Trump family's "World Liberty Financial" and invested an additional $30 million in WLF tokens. Warren questioned whether the transitions of both Trump Coin and Justin Sun from illegal to legal were guided by someone behind the scenes, suspecting Atkins' associates might have discussed these matters with the Trump family and Justin Sun.
Regardless, Trump's recent major changes in cryptocurrency policy and collaboration with Musk have dissatisfied opposition parties, the Democratic Party, and left-wing individuals. Recently, a clear camp confrontation has formed around the Tesla controversy. With Atkins' past involvement in the FTX case and consulting for many crypto projects, he may become a new battleground for U.S. regulation and power struggles.
