Sam Bankman-Fried, the former CEO of collapsed cryptocurrency exchange FTX, said on Wednesday that he never intended to commit fraud at his cryptocurrency exchange, ascribing the billions which are missing to him having a “bad month.”
Giving his first major public interview since the collapse of his multi-billion dollar cryptocurrency empire, as well as the collapse of his trading house Alameda Research, Bankman-Fried attributed the debacle to the fact he “screwed up” in running the exchange by not focusing more on risk management, customer protection, and the relationship between his crypto exchange, and his trading house.
He went on to concede, “I made a lot of mistakes,” in a remote video appearance at the New York Times DealBook Summit, adding, “There are things I would give anything to be able to do over again. I didn’t ever try to commit fraud on anyone.”
He noted he was down to his last $100,000, and only had a single working credit card left.
As he was making his appearance, regulators are in the process of taking apart exactly how the Bahamas-based cryptocurrency exchange wound up with an $8 billion discrepancy in its asset accounts, and if there was any mishandling of customer assets. There have been reports that Bankman-Fried had transferred customer funds from FTX to his trading house illicitly so they could be used to pay off loans which were called which had been used to fund risky trades, and could not be repaid.
Bankman-Fried argued, “We completely failed on risk. That feels pretty embarrassing, in retrospect.”
He went on to disavow any involvement in what was going on at Alameda however, saying, “I didn’t know the size of their position. A lot of these are things I’ve learned over the last month [in the days leading up to bankruptcy.”
Now helmed by a new CEO and undergoing Chapter 11 bankruptcy, FTX has been revealed to have billions in liabilities, and as many as 1 million customers whose funds are not available, and possibly missing.
The collapse of FTX set off a domino effect in the cryptocurrency world. BlockFi, a cryptocurrency lender which had made a nine-figure loan to FTX using customer assets in expectation of a return, instead was forced to file Chapter 11 itself and confront the fact that its customer funds may in fact be lost within FTX. Another lender, Genesis is currently searching for investment capital in hopes of avoiding the same fate, as customers of the Gemini exchange, founded by the Winklevoss twins, have been told that customers who put their funds in an earning account offered by the exchange in conjunction with Genesis, cannot access their funds, pending the resolution of the fate of Genesis.
