Sam Bankman-Fried, the founder and former CEO of now-bankrupt crypto exchange FTX, attempted to distance himself from suggestion of fraud in his first public appearance since his company’s collapse stunned investors and left creditors facing losses totaling billions of dollars.
Speaking on the Recent York Times’ Dealbook Summit with Andrew Ross Sorkin at what he said was against the recommendation of his lawyers, Bankman-Fried said that he didn’t knowingly commingle customer funds on FTX with funds at his proprietary trading firm, Alameda Research.
The liquidity crunch at FTX got here after Bankman-Fried secretly moved $10 billion of FTX customer funds to Alameda Research, Reuters reported, citing two people acquainted with the matter. A minimum of $1 billion in customer funds had vanished, the people said.
Bankman-Fried told Reuters the corporate didn’t “secretly transfer” but quite misread its “confusing internal labeling.
FTX filed for bankruptcy and Bankman-Fried stepped down as chief executive on Nov. 11, after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.
FTX filed for bankruptcy and Bankman-Fried stepped down as chief executive on Nov. 11.Getty Images
“By late on Nov. 6 we were putting together all of the info…that obviously must have been a part of the dashboards I used to be at all times taking a look at…and after we checked out that, there was a major problem there,” Bankman-Fried said.
Bankman-Fried added that he “didn’t ever attempt to commit fraud” and that he doesn’t personally think he has any criminal liability.
“The actual answer is that’s not what I’m specializing in. There’s going to be a time and place for me to type of take into consideration myself and my very own future,” he said.
The implosion of FTX marked a shocking fall from grace for the 30-year-old entrepreneur who rode a cryptocurrency boom to a net price that Forbes pegged a 12 months ago at $26.5 billion. After launching FTX in 2019, he became an influential political donor and pledged to donate most of his earnings to charities.
Since FTX filed for bankruptcy, Bankman-Fried has distanced himself from the image he projected in media interviews and on Capitol Hill, telling a Vox reporter his advocacy for a crypto regulatory framework was “just PR” and his discussions on ethics inside the industry were a minimum of partly a front.
Bankman-Fried said he was “confused” as to why FTX’s US entity shouldn’t be processing customer withdrawals. Redemptions are currently paused for each US and international customers.
“To my knowledge all American customers and all American regulated businesses listed below are, I feel a minimum of when it comes to client assets, are okay,” he said, adding that derivatives contracts at one among its US subsidiaries were “fully collateralized.”