Tuesday, March 21Welcome

FTX founder Sam Bankman-Fried: ‘Look, I failed’

New York
CNN business

Sam Bankman-Fried, 30, the founder of bankrupt cryptocurrency exchange FTX, admitted he made mistakes as CEO, but said, “I try to scam everyone. I never did,” he said.

Bankman-Fried made a virtual appearance at the New York Times’ DealBook Summit in New York and said: “I was shocked by what happened this month.”

In early November, Bankman-Fried stepped down as CEO of FTX and dozens of affiliates filed for bankruptcy in one of the most surprising corporate implosions to date. There was a rush to recover the billions of dollars deposited on the platform. Bankman-Fried’s own billions of dollars in personal wealth have evaporated. And crypto companies with financial exposure to FTX began to give in.

One of the key issues surrounding Bankman-Fried is whether his crypto exchange platform, FTX, misappropriated customer funds when lending to his hedge fund, Alameda.

“We didn’t mix the funds on purpose,” he said. “I was frankly surprised by the size of Alameda’s position.”

FTX experienced a bank runaway in early November and quickly collapsed during the liquidity crisis.

“Look, I messed up,” he said. “I was the CEO of FTX…I was responsible.”

Bankman-Fried acknowledged a lack of corporate control and risk management within the businesses he oversaw. This is an issue that FTX’s new CEO described as a “complete failure” in bankruptcy court filings.

“There was no one primarily responsible for FTX customer position risk,” Bankman-Fried told DealBook. “And looking back, it’s pretty embarrassing.”

Andrew Ross Sorkin Interviews FTX Founder Sam Bankman-Fried at the New York Times DealBook Summit

It is not yet clear how much FTX customers will benefit from the restructuring. Bankman-Fried suggested that customers in the US and Japan could get healthier, but didn’t give details on how.

Bankman-Fried’s past statements about the state of FTX and Alameda have come under close scrutiny as evidence of his lack of oversight came to light. Earlier in the liquidity crisis, he tweeted that FTX assets were “no problem” and sufficient to cover client holdings. Sometimes I deleted the tweet after a day.

he admitted the lack of supervision and questioned his knowledge

The FTX bankruptcy is being investigated by federal prosecutors in the Southern District of New York and by authorities in the Bahamas, where FTX is based, according to people familiar with the matter. Several financial regulators have also been in touch with the company’s new management team, led by a restructuring expert tasked with guiding FTX through bankruptcy.

Lawyers for Bankman-Fried did not respond to a request for comment.

His appearance at the DealBook Summit comes weeks after Bankman-Fried released several public apologies and comments to the media about the bankruptcy of his company.

“What SBF is doing is a kind of litigation suicide,” said Howard Fisher, a former attorney for the Securities and Exchange Commission. “Everything he says, when it is found to contradict the accepted evidence, is taken as evidence of deception…whether this is unrepentant arrogance, youthful overconfidence, or simply stupidity.” ,I do not know.”

In an interview Wednesday, Bankman-Fried was asked whether his lawyers encouraged him to speak out.

“They are not,” he said. “I mean, you know the classic advice, right?

“I owe it to you to explain what happened…just sitting locked up in a room pretending the outside world doesn’t exist and I don’t know what I’m getting.”

Asked about his personal wealth, which was estimated to be around $26 billion at its peak this spring, Bankman-Fried said he donated “everything” to FTX and had “100,000 in his bank account.” I believe there is a dollar or something close to it left.

—CNN’s Kara Scannell contributed to the report.

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