Sam Bankman-Fried, the 30-year-old founder of bankrupt cryptocurrency exchange FTX, said he “never tried to defraud anyone,” while admitting he made mistakes as CEO.
“There are things I could do anything to do again,” Bankman-Fried said in a virtual appearance at the New York Times DealBook Summit in New York. “I was shocked by what happened this month.”
Earlier in November, Bankman-Fried resigned as CEO of FTX after dozens of subsidiaries filed for bankruptcy in one of the most stunning corporate internal collapses ever. Almost overnight, customers around the world were left scrambling to get back the billions of money they had deposited on the platform. Bankman-Fried’s multi-billion dollar personal fortune evaporated. Cryptocurrency companies with financial exposure to FTX began to collapse.
One of the main questions surrounding Bankman-Fried is whether FTX, its cryptocurrency exchange, misappropriated customer funds when it made loans to its hedge fund, Alameda.
“I wasn’t mixing up the money on purpose,” he said. “I was honestly surprised by how huge the Alameda position was.”
‘I was in charge’ says former crypto CEO after bankruptcy
FTX experienced a bank run in early November and quickly collapsed in the midst of a liquidity crunch.
He said, “Look, I screwed up.” “I was the CEO of FTX… I had a responsibility.”
Bankman-Fried acknowledged a lack of corporate controls and risk management within the businesses he oversaw, a case that FTX’s new CEO described in bankruptcy court filings as a “complete failure.”
“There was no person primarily responsible for clients’ positional risk on FTX,” Bankman-Fried told DealBook. “And that feels very embarrassing later.”
It’s not yet clear how much, if any, FTX customers will be able to compensate in the restructuring. Bankman-Fried suggested that customers in the United States and Japan could be made complete, though he gave no details of how this could be done.
Bankman-Fried’s past statements about the case of FTX and Alameda are under close scrutiny as evidence of his lack of oversight has emerged. Early in the liquidity crisis, he tweeted that FTX’s assets were “good” and had enough to cover clients’ holdings. He deleted the tweet a day later while trying to organize a rescue that eventually collapsed.
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The FTX collapse is under investigation by federal prosecutors for the Southern District of New York, according to a person familiar with the matter, and by authorities in the Bahamas, where the companies are located. Several financial regulators have also been in touch with the company’s new management, led by restructuring professionals tasked with shepherding FTX through bankruptcy.
Bankman Fried’s attorney did not respond to requests for comment.
His appearance at the DealBook Summit comes weeks after Bankman-Fried issued several public apologies and comments to the press about his companies’ demise — something that left legal experts stunned.
“What the SBF is doing is a form of litigation suicide,” said Howard Fisher, a former SEC attorney. “Everything he says and turns out to be contrary to the accepted evidence will be taken as evidence of deception… Whether this is a sign of unrepentant arrogance, youthful overconfidence, or just sheer stupidity, I don’t know.”
In his interview on Wednesday, Bankman-Fried was asked if his lawyers were encouraging him to speak out.
“They’re not very much,” he said. “And I mean, you know the classic advice, right? ‘Don’t say anything, you know, duck down a hole.’”
He added, “It is my duty to explain what happened… I don’t understand what good I’m doing just by sitting in a room pretending the outside world doesn’t exist.”
He was asked about his personal wealth, which was estimated at $26 billion at its peak last spring. Bankman-Fried said he gave his “everything” to FTX and that he believed it was down to $100,000 “or something” in his bank account.
— CNN’s Cara Scannell contributed to this report.
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