Sam Bankman-Fried, the 30-year-old founder of defunct cryptocurrency exchange FTX, said he “never tried to defraud anyone,” while acknowledging that he was working as CEO made a mistake.
“There are some things that I would do anything to redo,” Bankman-Fried said during a virtual appearance at The New York Times’ DealBook Summit. “I’m horrified by what happened this month.”
In early November, Bankman-Fried resigned as FTX CEO after FTX and dozens of affiliates filed for bankruptcy, in one of the most shocking corporate implosions ever. Almost overnight, customers around the world were scrambling to get back the billions they had deposited on the platform. Bankman-Fried’s own billion-dollar personal fortune was wiped out. Crypto companies with financial exposure to FTX started to collapse.
One of the key questions surrounding Bankman-Fried is whether his crypto trading platform, FTX, misappropriated client funds when it provided loans to his hedge fund, Alameda.
“I didn’t mix the funds on purpose,” he said. “Frankly, I’m surprised at how big Alameda’s position is.”
FTX experienced a bank run in early November and quickly collapsed in a liquidity crunch.
“Look, I screwed up,” he said. “I’m the CEO of FTX…I have a responsibility.”
Bankman-Fried acknowledged that the businesses he oversaw lacked corporate controls and risk management, an issue that FTX’s new CEO described as a “complete failure” in bankruptcy court filings.
“No one is primarily responsible for the position risk of FTX clients,” Bankman-Fried told DealBook. “Looking back, it felt pretty embarrassing.”
It’s unclear how much, if any, FTX’s clients will be able to recover from the reorganization. Bankman-Fried suggested that customers in the US and Japan could be complete, but he did not provide a specific method.
Bankman-Fried’s past statements about the status of FTX and Alameda came under scrutiny as evidence of his lack of oversight came to light. In the early days of the liquidity crunch, he tweeted that FTX assets were “good enough” to cover client holdings. He deleted the tweet a day later as he tried to orchestrate an ultimately failed bailout.
He admits lack of oversight, calls into question his knowledge
Federal prosecutors for the Southern District of New York and authorities in the Bahamas, where the companies are based, are investigating the FTX collapse, according to a person familiar with the matter. Several financial regulators have also reached out to the company’s new management, led by restructuring experts tasked with guiding FTX through bankruptcy.
A lawyer for Bankman-Fried did not respond to a request for comment.
Weeks after Bankman-Fried issued a public apology and comments to the media about his firm’s collapse, his appearance at the DealBook summit — left legal experts flabbergasted.
“What the SBF did was a kind of litigation suicide,” said Howard Fischer, a former SEC attorney. “Anything he says that contradicts the admissible evidence will be taken as evidence of deceit … I don’t know if it’s stubborn arrogance, youthful overconfidence, or just plain stupidity.”
In Wednesday’s interview, Bankman-Fried was asked if his lawyers encouraged him to speak out.
“They’re very much not,” he said. “I mean, you know the classic advice, don’t you?” “Don’t say anything, you know, back in the hole.” ”
He added: “It’s my responsibility to explain what happened… I don’t see the benefit of me just locking myself in my room and pretending the outside world doesn’t exist.”
He was asked about his personal fortune, estimated to be around $26 billion when it peaked last spring. Bankman-Fried said he had given “everything” to FTX, and he believed he only had $100,000 “or something like that” in his bank account.
—CNN’s Kara Scannell contributed reporting.