Tech

FTX founder Bankman-Fried says he wasn’t ‘attempting to commit fraud’, intentionally misusing funds – National


Sam Bankman-Fried, founder and former CEO of the now bankrupt company electronic money exchange FTXtried to steer clear of fraudulent offers in his first public appearance since the collapse of his company that stunned investors and left creditors facing losses totaling thousands of dollars. billion dollars.

Speaking via video link at the New York Times Transaction Book Summit with Andrew Ross Sorkin on Wednesday, Bankman-Fried said he did not knowingly mix client funds on FTX with funds at the delivery firm. his exclusive translation, Alameda Research.

“I’ve never tried to commit fraud,” Bankman-Fried said in the hour-long interview, adding that he personally doesn’t think he bears any criminal responsibility. any.

He also denied knowing Alameda’s full location on FTX, claiming it caught him off guard.

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The liquidity crisis at FTX occurred after Bankman-Fried secretly transferred $10 billion in FTX client funds to Alameda Research, Reuters reported, quoted two people familiar with the matter. At least $1 billion in client funds disappeared, the people said.

Bankman-Fried told Reuters in November that the company was not “secretly transferring” but rather misreading “confusing internal labeling”.

FTX filed for bankruptcy and Bankman-Fried stepped down as chief executive on November 11, after traders withdrew $6 billion from the platform in three days and rival exchange Binance quit. rescue agreement.

“That week, a lot happened,” he said.


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What happened to FTX? The latest crypto crash puts the future of the industry in jeopardy


Bankman-Fried said he was speaking from the Bahamas and that interview was against the advice of his attorneys. He is seen in the video link talking from a room, wearing a black T-shirt and occasionally drinking from a cup.

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FTX faces a series of investigations. The U.S. Attorney’s office in Manhattan in mid-November began investigating how FTX handled customer funds, a source with knowledge of the investigation told Reuters. The Securities and Exchange Commission and the Commodity Futures Trading Commission have also opened polls.

When asked if he could come to the United States, Bankman-Fried replied that to his knowledge he can and that he would not be surprised if he traveled to Washington to attend the hearings. impending congressional demise of the company.

The boom of FTX marked a staggering downfall for the 30-year-old entrepreneur who fueled the crypto boom to a net worth that Forbes pegged a year ago at 26.5. billion dollars. After launching FTX in 2019, he became an influential political donor and pledged to donate most of his earnings to charities.

He said Wednesday that he’s now “almost nothing” and only has one active credit card with “probably $100,000 in that bank account.”

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Since FTX filed for bankruptcy, Bankman-Fried has distanced himself from the image he portrays in media interviews and on Capitol Hill, telling a Vox reporter his support. His view of the crypto regulatory framework is “PR only,” and his discussions about ethics in the industry are at least in part a front.

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Bankman-Fried said he was “confused” as to why FTX’s U.S. institution, which was filed for bankruptcy, was not processing customer withdrawals. Redemption is currently on hold for both US and international customers.

“To my knowledge, all of the US clients and all the US managed businesses here, I think at least in terms of client assets, are fine,” he said, adding that the The derivatives contract at one of its U.S. subsidiaries was “fully collateralized.”

Bankman-Fried says that Alameda has built a significant position on FTX and as the price of the digital asset has plummeted this year, Alameda has become more and more leveraged to the point of no return to the beginning. this month.

“Really speaking, there is (no) chance that FTX could liquidate that position and create everything owed,” he said.

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Click to play video: 'FTX crashed due to unauthorized trading as millions of cryptocurrencies disappeared'


FTX crashes due to unauthorized trading as millions of cryptocurrencies disappear


He added that he was “not trying to mix funds,” but said that when FTX didn’t have a bank account, some customers had money transferred to Alameda and credited to FTX, which could lead to a crash. distinctive.

Bankman-Fried stepped down as CEO of Alameda in October 2021, four years after founding the company, and ceded the role to Caroline Ellison and Sam Trabucco, who served as Co-CEOs for the company. until Trabucco left the company in August.

For his part, Bankman-Fried said he regrets focusing more on the big picture at FTX and neglecting risk management, something he said he has paid less attention to in the “last year or two.” “.

His companies “completely failed” at managing risk, he said.

“There is no person primarily responsible for the risk of a client’s position on FTX, and that feels pretty embarrassing in retrospect.”

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(Reporting by Carolina Mandl and Lananh Nguyen in New York and Manya Saini in Bengaluru; writing by Hannah Lang in Washington; editing by Megan Davies, Deepa Babington and Sam Holmes)

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