Not a good look for the SEC.
But this kind of shadowy argument that someone's father's ex-boss' best friend's cousin is some sort of smoking gun is nonsense.
At the end of the day, there were no implemented regulatory changes that benefited FTX or SBF. All the misappropriation of customer funds, the news about SBF having a secret "back door" for funds transfers happened regardless of any regulatory changes (or, as I stated, lack thereof) in DC.
SBF's parents are Stanford lawyers who specialize in compliance and ethics. Alameda CEO's dad runs the economics department at MIT, where the current SEC Chairman was a professor. Sam was a key crypto advisor to congress and a top political donor. All of these people turned a blind eye to Sam and FTX and Alameda when it was their job to do the opposite.
FBX's chief lobbyist is a former CFTC commissioner, who is now distancing himself. https://twitter.com/EpsilonTheory/status/1591194581843836928
Nepotism and corruption played a role here.
As others have pointed out, you don't need to appeal to securities law to find that what SBF appears to have done is fraud and theft: FTX's Ts and Cs say they wouldn't lend out customer funds. By all accounts they did lend those funds to Alameda, in addition to the fact that 1 billion in customer deposits is missing. Theft is theft, and I just fail to see (and, to be honest, haven't seen any cogent arguments to the contrary) how a more adversarial SEC would have prevented that.
Edit: for those downvoting, actually interested in an argument with specifics of how politicians enabled SBF's fraud.