top of page

FTX founder Sam Bankman-Fried says he made a mistake, but not a fraud.

The disgraced CEO said he "did not deliberately misappropriate funds" from FTX's sister company, Alameda Research.



Sam Bankman-Fried, the disgraced crypto billionaire, told the New York Times DealBook Summit on Wednesday that he never tried to commit fraud and was "shocked" by the collapse of his business.

Bankman-Fried, glassy-eyed and visibly shaking at times, appeared by video conference from an anonymous room in the Bahamas. He told the New York Times DealBook Summit that he was "deeply sorry for what happened," but always maintained that he did not have a complete picture of what was happening within the various subsidiaries of FTX, his now-bankrupt cryptocurrency exchange, and its ramifications.


Bankman-Fried resigned as CEO of FTX when it filed for bankruptcy earlier this month. The true consequences of the collapse are still emerging. FTX owes $3.1 billion (£2.57 billion) to its largest creditors, assets have disappeared, law enforcement and regulators are scrambling, and Bankman-Fried's largesse to America's political elite is set to cause a firestorm in Washington.


A key question about the collapse is whether FTX client funds were embezzled and given to FTX's hedge fund, Alameda Research. When questioned by New York Times columnist Andrew Ross Sorkin, the 30-year-old appears to shift the blame to Alameda.


"I deliberately did not exchange funds," he said. "I was surprised by how big Alameda's position was."

Asked if he had behaved like a bank teller who takes cash home from the cash register in the evening, Bankman-Fried replied, "Look, I wasn't in charge of Alameda and I didn't know exactly what was going on and the extent of their position." Alameda's CEO Caroline Ellison, however, allegedly had an affair with Bankman-Fried.


"Look, I had a bad month but it doesn't matter," he told the audience amid laughter. "What matters here is all the customers and stakeholders who have been harmed and helping them. What happens to me is not the important part."

In interviews prior to the conference, some of the leading figures in finance commented on the scandal. Larry Fink, chief executive officer of BlackRock, the world's largest asset manager, said the collapse of FTX appears to be the result not only of mismanagement but also of bad behavior. Fink hinted that his company, which had invested $24 million (£20 million) in FTX, may have been given misleading information.


"At this time, we can make all the appropriate assessments: there seems to have been major misconduct," he told the conference. "Could we have been misled? Until we have more facts, I will not speculate."

Treasury Secretary Janet Yellen said the FTX collapse was a "Lehman moment" for the cryptocurrency industry and described cryptocurrencies as "very risky assets."


Bankman-Fried's appearance at the Times' DealBook summit comes after he gave a series of discursive and sometimes nonsensical explanations for the circumstances of FTX's collapse, including blaming "internal mislabeling" of accounts for the company's $8 billion (£6 billion) asset shortfall.


Last week he was dropped by leading U.S. attorney Paul Weiss after FTX's lawyers claimed he was obstructing the company's bankruptcy reorganization efforts with a "relentless and disruptive tweet."



He admitted on stage that his lawyers disagreed with his decision to speak at the conference.


Bankman-Fried, whose personal fortune was estimated at $26 billion (£21 billion) at its peak, said he had about $100,000 (£83,000) to his name. Asked if he had been truthful in the interview, he said:


"I was as sincere as I am capable of being."

The U.S. Senate Agriculture Committee has scheduled a hearing on "Lessons Learned from the FTX Crash" for Thursday, with Commodity Futures Trading Committee Chairman Rostin Behnam expected to appear as a witness. This will be followed on Dec. 16 by a hearing of the House Financial Services Committee. The latter said it expects Bankman-Fried to be present.



How will the FTX affair unfold? Will investors, large and small, be able to review their funds? Let us know on Discord...



Comments


Iscriviti alla Newsletter

 

Grazie per l'iscrizione!

Latest Articles

bottom of page