Former FTX CEO Bankman-Fried Claims He Was Unaware of Misuse of Client Money -ABC News By Reuters

© Reuters. FILE PHOTO: Cryptocurrency representations are seen in front of the FTX logo shown in this illustration taken November 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

By Hannah Lang and Susan Heavey

WASHINGTON (Reuters) – FTX founder Sam Bankman-Fried denies knowing the deposits are being used to pay his affiliated crypto trading firm Alameda Research, he told ABC News in an interview. The interview is broadcast on Thursdays.

That interview comes less than a day after Bankman-Fried appeared via video link at the New York Times DealBook Summit with Andrew Ross Sorkin, in which he said he “never tried” commit fraud” and neither did he personally. think he bears any criminal responsibility for the collapse of the company.

FTX filed for bankruptcy and Bankman-Fried stepped down as chief executive on November 11, after traders withdrew $6 billion from the platform in three days and rival exchange Binance quit. rescue agreement.

The liquidity crisis at FTX came after Bankman-Fried secretly transferred $10 billion in FTX client funds to Alameda Research, Reuters reported, citing two people familiar with the matter.

Asked if he knew if the money was going to Alameda, the former FTX executive told ABC: “I’m not aware of any misuse of customer funds.”

In an interview with New York magazine published on Thursday but conducted on November 17, Bankman-Fried also blamed the large losses at FTX on mislabeled insider accounts. , arguing that Alameda’s effective position in a hard-to-see account “is billions of dollars bigger than it looks.”

Bankman-Fried said Alameda has built up a significant position on FTX, and as digital asset prices plummeted this year, Alameda became increasingly leveraged to the point where it was no longer profitable at the beginning of the month. this.

Four years after founding Alameda, Bankman-Fried stepped down as CEO of the company in October 2021 and ceded the role to Caroline Ellison and Sam Trabucco, who serve as co-CEOs for the company. until Trabucco left the company in August.

“These issues are issues that I believe happened about last year. And I didn’t run Alameda that year. I wasn’t acutely aware of what was going on,” Bankman-Fried said. with New York Magazine.

During a Twitter Spaces live event on Thursday, Bankman-Fried said he was “under tremendous pressure” to bring FTX’s US subsidiary into bankruptcy proceedings, even though, to his knowledge, FTX US was financially solvable.

He claims he was misinformed by “people whom I no longer believe are acting in the customer’s interest,” but declined to elaborate.

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