Sam Bankman-Fried says he ‘never tried to cheat’

NEW YORK, Nov 30 (Reuters) – Sam Bankman-Fried, the founder and former CEO of now-bankrupt cryptocurrency exchange FTX, tried to distance himself from suggestions of fraud in his first public appearance since his company’s bankruptcy, stunning investors and confronting creditors. billions of dollars worth of losses.

Speaking via video link at the New York Times’ Dealbook Summit with Andrew Ross Sorkin on Wednesday, Bankman-Fried said he did not knowingly mix client funds at FTX with funds at a private trading firm called Alameda Research.

“I never attempted to commit fraud,” Bankman-Fried said in an hour-long interview, adding that she did not personally think she was criminally responsible.

He also denied knowing the full extent of Alameda’s position at FTX, claiming it surprised him.

The liquidity crisis at FTX occurred after Bankman-Fried secretly transferred $10 billion of FTX client funds to Alameda Research, Reuters reported, citing two people familiar with the matter. At least $1 billion in client funds disappeared, the people said.

Bankman-Fried told Reuters in November that the company did not “covertly transfer” but instead misread “confusing internal labeling.”

FTX filed for bankruptcy and Bankman-Fried resigned as CEO on November 11 after traders pulled $6 billion from the platform in three days and rival exchange Binance backed out of a bailout deal.

“A lot happened that week,” he said.

Bankman-Fried said he was speaking from the Bahamas and that the interview was against the advice of his lawyers. In the video link, he was seen talking from the room, wearing a black shirt and occasionally drinking from a cup.

FTX is facing a lot of scrutiny. In mid-November, the U.S. Attorney’s Office in Manhattan began investigating how the FTX handled client funds, a source with knowledge of the investigation told Reuters. The Securities and Exchange Commission and the Commodity Futures Trading Commission have also opened investigations.

When asked if he could come to the United States, Bankman-Fried said that as far as he knew, he could and that he would not be surprised if he traveled to Washington for the upcoming congressional hearings on the company’s dissolution.

FTX’s implosion has come as a stunning understatement for the 30-year-old entrepreneur, who rode the cryptocurrency boom to a net worth estimated at $26.5 billion by Forbes a year ago. After launching FTX in 2019, he became a prominent political donor and pledged to donate most of his earnings to charities.

On Wednesday, he said he is now left with “close to nothing” and is down to one active credit card with “maybe $100,000 in that bank account.”

Since the FTX bankruptcy filing, Bankman-Fried has distanced herself from the image she projected in media interviews and on Capitol Hill, telling a Vox reporter that her defense of the crypto regulatory framework was “just PR” and that she has debated ethics within the industry. at least a partial front.

Bankman-Fried said she was “confused” that the U.S. entity of FTX, which was included in the bankruptcy filing, did not handle cases involving customer withdrawals. Payments are currently suspended for both US and international customers.

“To the best of my knowledge, all the American clients here and all the American regulated entities, I think, are fine, at least in terms of client assets,” he said, adding that the derivative contracts at one of its US subsidiaries were “fully secured.”


Bankman-Fried said Alameda had built up a significant position in FTX, and as digital asset prices have fallen sharply this year, Alameda has increasingly hit the point of no return earlier this month.

“Truthfully speaking, the FTX did not have the ability to cancel this position and create everything that was owed,” he said.

He added that he “wouldn’t try to commingle the funds,” but that some customers transferred money to Alameda when FTX didn’t have a bank account and credit was given to FTX, possibly leading to discrepancies.

Bankman-Fried stepped down as CEO of Alameda in October 2021, four years after the company was founded, handing over the role to Caroline Ellison and Sam Trabucco, who served as CEOs until Trabucco left the firm in August.

For her part, Bankman-Fried said she regretted focusing on the bigger picture at FTX at the expense of risk management, which she said had been less focused “in the last year or two.”

His companies “completely failed” in risk management, he said.

“There was no one person at FTX who was responsible for the position risk of clients, and it feels quite embarrassing in retrospect.”

Reporting by Carolina Mandl and Lananh Nguyen in New York and Manya Saini in Bengaluru; Writing by Hannah Lang in Washington; Edited by Megan Davies, Deepa Babington and Sam Holmes

Our standards: Thomson Reuters Trust Principles.

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