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Striking a contrite tone, former FTX CEO Sam Bankman-Fried said he “didn’t do a good job” at upholding his responsibilities to regulators, customers, and investors in a hotly anticipated conversation with CNBC’s Andrew Ross Sorkin at the Dealbook Summit.
“I didn’t ever try to commit fraud on anyone,” Bankman-Fried said. “I saw it as a thriving business and I was shocked by what happened this month.”
Sorkin asked Bankman-Fried why FTX and Bankman-Fried even had access to customer money.
“I wasn’t running Alameda, I didn’t know exactly what was going on, I didn’t know the size of their position,” Bankman-Fried said. “A lot of these are things I’ve learned over the last month [in the days leading up to bankruptcy.
Bankman-Fried appeared by video feed from the Bahamas, Sorkin said. Sorkin pressed Bankman-Fried on Alameda’s gambling on questionable cryptocurrencies, reading a letter out from an investor who lost his life savings of $2 million.
“The U.S. platform is fully solvent and funded,” Bankman-Fried said. “I believe withdrawals could be opened up today and be made whole.”
Bankman-Fried defended the fact that he was unaware of the Alameda exposure. In 2019, he said, 40% of FTX’s volume was from Alameda. By 2022, Bankman-Fried claimed, that number was down to 2%, which led him to believe that FTX’s exposure was lessened.
Sorkin continued to press Bankman-Fried on the lending of customer assets. Bankman-Fried demurred.
“In 2018, FTX didn’t have bank accounts,” Bankman-Fried said as justification for why users were asked to wire funds to an account in Alameda’s name instead of directly to FTX.
Rumors had flown since FTX’s November 11 implosion about whether Bankman-Fried would appear at the event. In a tweet last week, the former FTX CEO confirmed he’d sit down to talk with Sorkin.
Bankman-Fried’s FTX imploded in mid-November after Coindesk reported irregularities in FTX balance sheets. Since FTX filed for bankruptcy protection in Delaware on Nov. 11, Bankman-Fried has engaged with the media sporadically. “F*** regulators,” he told a Vox reporter in a Twitter message.
“I f***** up,” he wrote in another Tweet.
Semafor disclosed messages between Tesla CEO Elon Musk and Bankman-Fried, in which Musk invited the former crypto billionaire to roll over his $100 million stake in Twitter.
FTX was once hailed as the poster child of responsible crypto. Regulators and lawmakers looked to Bankman-Fried as the future of crypto regulation, a reputation that Bankman-Fried cultivated through appearances before Congress and deepened through generous political contributions.
Bankman-Fried was already known as one of the largest donors to Democratic candidates. He claimed in a recent interview that he gave equally generously to Republican causes, through so-called “dark pool” contributions.
Reporters, Bankman-Fried said, “freak the f*** out if you donate to Republicans.”
This is a developing story. Please check back for updates.
