In an apologetic tone, former FTX CEO Sam Bankman-Fried said he “didn’t 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.
Bankman-Fried’s FTX explodes in mid-November after Coindesk reported irregularities in the company’s balance sheet. Company filed for Chapter 11 bankruptcy guard in Delaware on November 11.
“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.
“We totally failed at risk,” continued Bankman-Fried. “That feels pretty embarrassing, in retrospect.”
Bankman-Fried appeared using a video feed from the Bahamas, Sorkin said. “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 are very no.”
“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.]”
The new leadership at FTX says that Bankman-Fried has exercised significant control over the entire empire.
Sorkin pressed Bankman-Fried about Alameda’s suspicious cryptocurrency gambling, reading a letter from an investor who lost his $2 million savings.
“The U.S. platform is fully solvent and funded,” Bankman-Fried stated. “I believe a withdrawal can be opened today and done in its entirety.”
“Can I ask you about the medicine?” Sorkin said. “It’s funny to hear this. I drink half a glass of wine a year,” Bankman-Fried replied.
The FTX founder has denied claims of wild partying and off-label drug use, saying that FTX functions include “board games” or “dinner parties.”
Bankman-Fried stated that he was unaware of the exposure to 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 did not 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.
Bankman-Fried only engaged with the media sporadically. “Damn regulators,” he told a Vox reporter in a Twitter message.
“I’m damned,” he wrote in another Tweet.
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 largest 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.”
