Sam Bankman-Fried Denies Fraud in FTX Collapse – Rolling Stone

Even as critics Annoyed that he’s no longer in jail and rumored to be canceling his risky public appearance, failed cryptocurrency exchange FTX co-founder Sam Bankman-Fried gave a live video interview. New York TimesDealBook Summit conference call on Wednesday.

Speaking from the Bahamas, where the headquarters of the FTX is located, Bankman-Fried said Time financial columnist Andrew Ross Sorkin, “I’m not trying to defraud anybody.”

The Securities and Exchange Commission, the Commodity Futures Trading Commission and the US Department of Justice are currently investigating how FTX, once the world’s third-largest cryptocurrency valued at $32 billion, opened within a few days in early November. Binance, a rival exchange that moved to rescue it through a buyout, later pulled out of the deal, saying FTX’s problems were “beyond our control or ability to help.”

Amid the chaos, Bankman-Fried was forced to resign as CEO, allowing the company to file for bankruptcy, but only after desperately clinging to power for days, despite company executives calling for him to step down.

“I’ve made a lot of mistakes, I’d give anything to be able to do it again,” Bankman-Fried told Sorkin in an hour-long conversation during which he drank pamplemousse LaCroix, stomped his foot, and stopped often. his eyes rolled down. Another of his conclusions: “I’ve had a bad month.”

At one point, Sorkin quipped, “Sounds like a bunch of kids on Adderall having a sleepover.”

Bankman-Fried replied, “We got very confused.” However, he denied that the FTX team in the Bahamas had an out-of-control drug culture. “We used to play board games at our parties,” he said. “I didn’t see any illegal drug use” He said he was prescribed drugs to help focus and concentrate.

The smoldering ruins of FTX are now overseen by CEO John J. Ray III, a corporate turnaround expert who managed the aftermath of the 2001 Enron accounting scandal. In the bankruptcy petition of FTX, he wrote: “I have never seen in my career. A complete failure of corporate control and a complete lack of reliable financial information, as is the case here. Investors are devastated, the balance sheet has an unexplained $8 billion shortfall, and the stock still owes $3.1 billion to its top 50 creditors.

Many hold Bankman-Fried personally responsible for the crisis, and significant questions remain about whether FTX and Alameda Research — the sister trading firm it co-founded — misappropriated client funds. On Nov. 22, lawyers told a Delaware bankruptcy court that Bankman-Fried ran FTX as a “personal racket,” describing the company’s huge real estate deals in the Bahamas (where it is headquartered) and publicly disclosing a “significant amount” of its assets. . either stolen or missing.” The ripple effects of the collapse reached Congress as Bankman-Fried funneled millions in political donations to Democrats and Republicans while lobbying Washington on behalf of the crypto industry.

During the first half of the interview, Sorkin pressed the connection between the FTX and Alameda, with Bankman-Fried repeatedly claiming she had little idea what happened in the latter case. “I was nervous because of the conflict of interest, because I was so involved,” he said. “I didn’t have the latitude to run two companies at once.” At issue are the large sums of client money owed by FTX to Alameda to cover the firm’s mounting losses, which, as with almost every bad decision that has come to light, suggests that Bankman-Fried was more of a mistake than an intentional wrongdoing. “I didn’t knowingly pool the funds,” he said.

As for staying out of the U.S. for fear of charges or arrest, Bankman-Fried said she believes she can travel freely and is considering it. “Personally, I don’t think so [criminal liability],” he noted, though “that’s not what I focus on,” because “all the customers are important here.” He estimated that he would be able to answer questions at congressional hearings. Billionaire Mark Cuban recently told TMZ that if he were in the young man’s shoes, he would be “scared of going to prison for a long time.”

We agree to a live broadcast New York Times It seems like poor legal strategy for someone under the intense scrutiny Bankman-Fried faces, but it’s uncharacteristic of the 30-year-old former billionaire. On November 18, his attorneys at the Paul Weiss firm were fired, citing a conflict of interest in representing him, as well as self-sabotage with “incessant and disruptive tweets.”

When asked what Sorkin’s current attorneys thought about her agreeing to an interview — a question that drew laughter from the audience — Bankman-Fried said they were adamantly opposed, adding, “I have an obligation to speak up and explain what happened.”

Bankman-Fried now claims she only has $100,000 in the bank and told Sorkin she has one working credit card. Some cypto watchers believe that he has a much larger amount hidden. “I have no hidden funds here,” he said.

The Time and other major media outlets have also come under fire for continuing to write what some consider to be a “nice piece” on the disgraced entrepreneur, and a number of prominent investors are outraged that The newspaper again gave him a big platform to weave his story about the sudden death of FTX. Before introducing Bankman-Fried, Sorkin defended the interview’s journalistic importance, calling it “one of the most important” of the day.

Sorkin read an angry letter early on from a man who claimed he had lost his life savings on FTX — about $2 million — but Bankman-Fried was able to talk about the exchange’s implosion, mostly due to the failure of the venture. Management continues to express surprise at the speed and scale of the accident. Several times he claimed that he simply did not have access to relevant information or details.

At the end of the interview, Sorkin asked if he had been honest throughout their discussion. Bankman-Fried stuttered a little instead of saying “yes,” and eventually came up with a not-so-convincing statement.

“I was as true as I was knowledgeable,” he said.


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