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Former FTX general counsel tells House panel $8 billion in customer assets were missing; urges segregation and examinations
Summary
Ryan Miller, who served as general counsel at FTX US, told the House Agriculture Committee that the FTX collapse resulted from concealed fraud and that federal registration, segregation of customer funds and routine examinations would have prevented the loss.
Ryan Miller, a partner at Lowenstein Sandler LLP and former FTX US general counsel, told the House Committee on Agriculture that the collapse of FTX global in November 2022 was the product of “a concealed fraud performed by the most senior members of the FTX founding team,” not a standard bank run. Miller testified that he learned in early November 2022 that “approximately $8,000,000,000 in customer assets on the FTX global platform were simply gone.”
Miller said FTX’s failure illustrated missing regulatory guardrails on some crypto platforms and urged Congress to adopt statutory protections that would require customer‑asset segregation, regular examinations, independent governance and auditing. “Customer asset segregation, regular examination, governance requirements, and auditing would have been in place,” he said, describing those protections as tools that would have limited the risk of misappropriation.
Witnesses and members repeatedly returned to the example during the hearing. Chelsea Pizzola, a partner who previously served as deputy chief of staff at the CFTC, noted that CFTC‑regulated entities in the FTX group were able to return customer funds without losses because of segregation and legal-accounting structures the agency enforces. Miller said registration under a federal framework would bring exam and audit powers that “allow both regulators and the governance body of any entity to ensure that what the entity says is happening is taking place.”
Lawmakers of both parties and multiple witnesses described the Clarity Act’s registration and compliance provisions as a direct response to failures like FTX. Panelists said the bill’s tools would give regulators a route to shift from post‑hoc enforcement toward ongoing supervision—examinations, audits and surveillance—aimed at preventing the type of misappropriation Miller described.
The testimony was offered as lawmakers weigh statutory changes that would allocate primary market responsibilities and secondary‑market authority between the SEC and CFTC, and create registration and oversight regimes for platforms that custody or otherwise control customer assets.
