‘I’ve had a bad month, ‘didn’t ever try to commit fraud:’ Former FTX CEO Sam Bankman-Fried

In an apologetic tone, former FTX CEO Sam Bankman-Fried said he “did not do a good job” in maintaining his accountability to regulators, customers and investors. in a much-anticipated heated conversation with CNBC’s Andrew Ross Sorkin at the Dealbook Summit.

“I have never tried to scam anyone,” Bankman-Fried said. “I saw it as a thriving business and I was shocked by what happened this month.”

“I had a bad month,” Bankman-Fried added later.

Sorkin said Bankman-Fried appeared using a video feed from the Bahamas. “I was in the Bahamas last year,” Bankman-Fried said when asked why he stayed in the island nation.

Sorkin asked Bankman-Fried what drove his acquisitions in the crypto industry, given the size of Alameda’s loans from companies Bankman-Fried plans to acquire.

Bankman-Fried stated that he believes that by mid-2022, Alameda has repaid all lines of credit for various loan tables. But Alameda still owes BlockFi more than $670 million, according to court filings.

“What are your attorneys telling you right now? Are they suggesting that you speak up?” Sorkin asked the former billionaire.

“No, they’re very few.”

“The time when I really knew there was a problem was on November 6th,” said Bankman-Fried, after Alameda’s sizable FTT position was revealed by Coindesk. “When we look at that, there’s a potentially serious problem.”

“Alameda was a big hit” at the time. “We saw a run-in when the bank started operating,” Bankman-Fried said.

“I was worried [when] Bankman-Fried said Alameda’s balance sheet” has been disclosed by Coindesk, but expects the damage to be limited to Alameda, rather than an “existential” crisis for FTX.

Sorkin asked Bankman-Fried why FTX and Bankman-Fried even had access to customer funds.

“I don’t run Alameda, I don’t know exactly what’s going on, I don’t know the size of their position,” Bankman-Fried said. “A lot of these are things I’ve learned over the past month [in the days leading up to bankruptcy.]”

New leadership at FTX says that Bankman-Fried has exercised significant control over the entire empire.

Sorkin pressed Bankman-Fried about Alameda’s suspicious crypto gambling, reading a letter from an investor who had lost his life savings of $2 million.

“The U.S. platform is fully liquidable and funded,” Bankman-Fried said. “I believe a withdrawal can be opened today and done in its entirety.”

Bankman-Fried defended the fact that he was unaware of the contact with Alameda. He said that in 2019, 40% of FTX’s volume was from Alameda. By 2022, Bankman-Fried claims, that number drops to 2%, which leads him to believe that FTX exposure has decreased.

Sorkin continued to press Bankman-Fried about lending to customers’ properties. Bankman-Fried refused.

“In 2018, FTX didn’t have a bank account,” Bankman-Fried explained why users were asked to transfer funds to an account in Alameda’s name instead of directly to FTX.

Rumors have been circulating since FTX’s November 11 outburst about whether Bankman-Fried would make an appearance at the event. In a tweet last week, the former FTX CEO confirmed that he would sit down to talk with Sorkin.

Bankman-Fried FTX blew up in mid-November after Coindesk reported anomalies in the FTX balance sheet. Since FTX filed for bankruptcy protection in Delaware on November 11, Bankman-Fried has been infrequently involved with the media. “Damn regulators,” he told a Vox reporter in a Twitter message.

“Damn it,” he wrote in another Tweet.

Semafor has revealed messages between Tesla CEO Elon Musk and Bankman-Fried in which Musk invited the former crypto billionaire to transfer his $100 million worth of shares in Twitter.

FTX was once hailed as the offspring of responsible crypto. Regulators and lawmakers see Bankman-Fried as the future of crypto regulation, a reputation Bankman-Fried has built through appearances before Congress and deepened through contributions. generous political contributions.

Bankman-Fried has been known to be one of the biggest donors to Democratic candidates. He stated in a recent interview that he has contributed equally generously to Republican causes, through so-called “black puddles” donations.

Reporters, Bankman-Fried said, “go crazy if you donate to the Republican party.”

This is an evolving story. Please check back for updates.


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