Even as reviews Furious that he wasn’t already in jail, and rumors swirled that he would cancel the risky public appearance, Sam Bankman-Fried, co-founder of failed cryptocurrency exchange FTX, gave a live video interview to top it off. New York Times‘DealBook Summit conference on Wednesday.
Speaking from the Bahamas, where FTX is headquartered, Bankman-Fried said Time financial columnist Andrew Ross Sorkin, “I never tried to defraud anyone.”
The Securities and Exchange Commission, Commodity Futures Trading Commission and US Department of Justice are all currently investigating how FTX, once the world’s third-largest crypto exchange and valued at $32 billion, collapsed in just a few days in early November. Binance, a rival exchange that decided to save it with an acquisition, later backed out of the deal, saying FTX’s issues were “out of our control or ability to help.”
Amid the chaos, Bankman-Fried was forced to resign as chief executive and allowed the company to file for bankruptcy, but only after days of desperately clinging to power despite company executives. urging him to resign.
“I made a lot of mistakes, there are things I would give anything to do again,” Bankman-Fried told Sorkin in their hour-long chat, during which he drank a LaCroix grapefruit, tapped his foot and often kept his eyes downcast. Another of his conclusions: “I had a bad month.”
At one point, Sorkin, pushing him on the irresponsibility of FTX’s management and reports of the hedonistic luxury they lived in, quipped, “It looks like a bunch of kids on Adderall having a sleepover.”
“We screwed up big,” Bankman-Fried replied. He, however, denied that the FTX team in the Bahamas had a drug culture that was out of control. “At our parties, we played board games,” he said. “I haven’t seen any illegal drug use.” He said he was prescribed medication that helped him focus and concentrate.
The smoldering ruins of FTX are now overseen by CEO John J. Ray III, a corporate turnaround specialist who handled the aftermath of the 2001 Enron accounting scandal. In FTX’s bankruptcy filing, he has writes: “Never in my career have I seen such a complete failure of corporate controls and a complete lack of reliable financial reporting as has happened here. Investors have been wiped out, there is a lack to gain an unexplained $8 billion on the balance sheet and the stock exchange still owes $3.1 billion to its 50 major creditors.
Many hold Bankman-Fried personally responsible for the crisis, and there remain significant questions about whether FTX and Alameda Research — a sister trading company he also co-founded — misused client funds. On Nov. 22, attorneys told Delaware bankruptcy court that Bankman-Fried ran FTX like a “personal fiefdom,” describing the company’s massive real estate transactions in the Bahamas (where it is headquartered) and stating bluntly that a “substantial amount” of his assets “were stolen or went missing. The ripple effects of the collapse reached Congress, as Bankman-Fried funneled millions in political donations to Democrats and Republicans while lobbying in Washington on behalf of the crypto industry.
In the first half of the interview, Sorkin dwelt on the connection between FTX and Alameda, with Bankman-Fried repeatedly saying he had no idea what was going on at the latter company. “I was nervous, because of the conflict of interest, of being too involved,” he said. “I didn’t have the bandwidth to run two businesses at once.” The problem is the massive loans of customer money that FTX made to Alameda to cover the company’s mounting losses, which – as with almost every bad decision that has come to light – Bankman-Fried was framed as a mistake. rather than as a deliberate wrongdoing. “I did not knowingly mix funds,” he said.
On the question of charges or staying outside the United States for fear of arrest, Bankman-Fried said he thought he could travel freely and had considered it. “I personally don’t think I have [criminal liability]he noted, though he claimed that “that’s not what I’m focusing on” because “what matters here is all the customers.” He speculated that he might eventually answer questions during a congressional hearing. Billionaire Mark Cuban recently told TMZ that if he were the young man, he “would be scared of going to jail for a long time.”
Agree on a sit-down livestream with the New York Times It seems like bad legal strategy for someone under the intense scrutiny Bankman-Fried is facing, but it’s not out of place for the 30-year-old former billionaire. On November 18, he was dropped by his lawyers at the firm Paul Weiss, who cited conflicts of interest to represent him and also complained that he was self-sabotaging with “relentless and disruptive tweets”.
Asked by Sorkin what his current lawyers thought he was agreeing to the interview with – a question that caused the audience to laugh – Bankman-Fried said they were strongly opposed, adding: “I have a duty to speak and explain what happened.”
Bankman-Fried now claims to only have $100,000 in the bank and told Sorkin he only has one working credit card left. Some crypto watchers believe it has far larger sums in store. “I have no hidden funds here,” he insisted.
The Time and other major media outlets have also been criticized for continuing to write what some consider “flaky articles” about the disgraced entrepreneur, and a number of high-profile investors have been outraged that the The newspaper had again given him a huge platform to weave his own narrative of FTX’s sudden demise. Before introducing Bankman-Fried, Sorkin defended the journalistic significance of the interview, calling it “one of the most important” of the day.
Sorkin read an angry letter early on from a man who claimed to have lost his savings in FTX — about $2 million — but for the most part, Bankman-Fried was largely able to talk about the implosion of the exchange due to a failure of the risk management, continually expressing surprise at the speed and scale of the crash. On several occasions, he simply claimed not to have access to relevant information or details.
At the end of the interview, Sorkin asked if he had been honest throughout their discussion. Stammering a bit instead of saying “yes,” Bankman-Fried finally landed on a not-so-reassuring phrase.
“I was as truthful as possible,” he said.
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