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

New York
CNN Business

Sam Bankman-Fried, the 30-year-old founder of bankrupt cryptocurrency exchange FTX, has admitted he made mistakes as chief executive, saying he was “not trying to cheat anybody”.

“There are things I would do anything to redo,” Bankman-Fried said in a virtual appearance at the New York Times’ DealBook Summit in New York. “I’m shocked by what happened this month.”

In early November, Bankman-Fried resigned as CEO of FTX, and their related company filed for bankruptcy in one of the most stunning corporate bankruptcies ever. Almost overnight, customers around the world were scrambling to get back the billions they had deposited into the platform. Bankman-Fried’s own multibillion-dollar personal fortune evaporated. And crypto firms with financial exposure to FTX began to fold.

One of the main questions surrounding Bankman-Fried is whether cryptocurrency exchange platform FTX misappropriated client funds while lending to the Alameda hedge fund.

“I didn’t mix the money on purpose,” he said. “I was frankly surprised at how great Alameda’s position was.”

Ex-Crypto CEO Says ‘I Was Responsible’ After Bankruptcy

FTX suffered a bank run in early November and quickly collapsed amid a liquidity crisis.

“Look, I’m bad,” he said. “I was the CEO of FTX… I had responsibility.”

Bankman-Fried acknowledged a lack of corporate oversight and risk management at the businesses it oversees, a problem that FTX’s new CEO described as a “complete failure” in bankruptcy court.

Bankman-Fried told DealBook that “there was no one person at FTX who was responsible for customer position risk.” “And it feels pretty embarrassing in retrospect.”

Andrew Ross Sorkin interviews FTX founder Sam Bankman-Fried at the New York Times DealBook Summit.

It’s not yet clear how much, if anything, FTX’s customers will get back in the restructuring. Bankman-Fried suggested that customers in the US and Japan could be integrated, although he did not elaborate on how.

Bankman-Fried’s past statements about FTX and Alameda’s situation are being scrutinized as evidence of her lack of oversight has come to light. At the start of the liquidity crisis, he tweeted that FTX’s assets were “good” and sufficient to cover client holdings. He deleted his tweet a day later and tried to organize a rescue program, which eventually collapsed.

He admitted to a lack of supervision, raising questions about his knowledge

The FTX collapse is being investigated by federal prosecutors in the Southern District of New York, and by authorities in the Bahamas, where the companies are based, according to a person familiar with the matter. Several financial regulators have also contacted the firm’s new management, led by restructuring specialists tasked with running FTX through bankruptcy.

An attorney for Bankman-Fried did not respond to requests for comment.

His appearance at the DealBook Summit comes after weeks of several public apologies and comments to the press about Bankman-Fried’s company’s demise — something that has left legal experts stunned.

“What the SBF is doing is kind of judicial suicide,” said Howard Fischer, a former lawyer for the Securities and Exchange Commission. “Anything he says that appears to contradict the accepted evidence will be treated as evidence of deception… I don’t know if it’s a sign of unrepentant arrogance, youthful overconfidence, or just stupidity.”

In an interview Wednesday, Bankman-Fried questioned whether her attorneys had encouraged her to speak.

“There aren’t many of them,” he said. “And I mean, you know the classic tips, right? ‘Don’t say anything, you know, get in a hole.’

He added: “I’m obliged to explain what happened … I don’t see the good in sitting locked in a room pretending the outside world doesn’t exist.”

He was asked about his personal fortune, which was estimated at $26 billion at its peak last spring. Bankman-Fried said she gave FTX “everything” and believed she had $100,000 “or something like that” in her bank account.

—CNN’s Kara Scannell contributed reporting.

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