Sam Bankman-Fried, the 30-year-old founder of bankrupt crypto exchange FTX, said he “never tried to defraud anyone,” while admitting he made mistakes by as general manager.
“There are things I would do anything to do again,” Bankman-Fried said during a virtual appearance at the New York Times DealBook Summit in New York City. “I was shocked by what happened this month.”
Earlier in November, Bankman-Fried resigned as CEO of FTX after he and dozens of affiliates filed for bankruptcy in one of the most stunning corporate implosions of all time. Almost overnight, customers around the world scrambled to recover the billions in funds they had deposited on the platform. Bankman-Fried’s multi-billion dollar personal wealth evaporated. And crypto firms financially exposed to FTX began to crumble.
One of the key questions surrounding Bankman-Fried is whether FTX, its crypto exchange platform, misappropriated client funds when it provided loans to its hedge fund, Alameda.
“I did not knowingly mix funds,” he said. “I was frankly surprised by the size of Alameda’s position.”
FTX experienced a run on the bank in early November and quickly crashed amid a liquidity crunch.
“Look, I screwed up,” he said. “I was CEO of FTX…I had a responsibility.”
Bankman-Fried acknowledged the lack of corporate controls and risk management within the companies he oversaw, an issue that FTX’s new CEO described in bankruptcy court filings as a “complete failure.”
“There was no one who was primarily in charge of client position risk on FTX,” Bankman-Fried told DealBook. “And that seems quite embarrassing in retrospect.”
It is not yet clear how much, if any, FTX customers will be able to recover during the restructuring. Bankman-Fried suggested that customers in the United States and Japan could be cured, although he did not elaborate on how.
Bankman-Fried’s past statements about the state of FTX and Alameda come under scrutiny as evidence of his lack of oversight comes to light. At the start of the liquidity crisis, he tweeted that FTX assets were “good” and there were enough to cover client holdings. He deleted the tweet a day later as he tried to orchestrate a bailout that ultimately fell apart.
HE acknowledged the lack of oversight, raising questions about his knowledge
FTX’s collapse is being investigated by federal prosecutors in the Southern District of New York, according to a person familiar with the matter, and by authorities in the Bahamas, where the companies were based. Several financial regulators have also been in contact with the company’s new management, led by restructuring specialists tasked with guiding FTX through bankruptcy.
Bankman-Fried’s attorney did not respond to requests for comment.
His appearance at the DealBook Summit comes after weeks in which Bankman-Fried issued several public apologies and commented to the press about the disappearance of his companies – which left legal experts speechless.
“What SBF is doing is a form of judicial suicide,” said Howard Fischer, a former Securities and Exchange Commission attorney. “Anything he says that is found to be contradicted by admissible evidence will be taken as evidence of deceit…I don’t know if it’s a sign of unrepentant arrogance, youthful overconfidence or simply sheer stupidity.”
During his interview on Wednesday, Bankman-Fried was asked if his lawyers encouraged him to speak out.
“They really aren’t,” he said. “And I mean, you know the classic advice, don’t you?” “Don’t say anything, you know, back into a hole.”
He added: “I have a duty to explain what happened… I don’t see what good is accomplished by sitting locked in a room pretending the outside world doesn’t exist.”
He was asked about his personal wealth, estimated to be around $26 billion at his peak last spring. Bankman-Fried said he gave “everything” to FTX and believed he only had $100,000 “or something” left in his bank account.
– CNN’s Kara Scannell contributed reporting.
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