In an unusual public spectacle for a failed financial mogul, former FTX executive Sam Bankman-Fried on Wednesday tried to sound contrite about the loss of customer billions even as he said he had little idea about what was going on at a company he founded.
Sam Bankman-Fried, former CEO of FTX, says ‘we messed up big’
“I wasn’t running Alameda. I didn’t know what was going on,” he said. “A lot of the things were things I learned over the last month.”
Bankman-Fried made the comments at the Times’s DealBook Summit in New York, where he was interviewed by Andrew Ross Sorkin, a columnist at the paper. The 30-year-old entrepreneur, who has given just a few audio and print interviews since his once-highflying company collapsed into bankruptcy earlier this month, appeared in a black T-shirt from an undisclosed location in the Bahamas, where he lives.
Seeming a bit nervous as he occasionally sipped a can of La Croix sparkling water, Bankman-Fried referenced personal accountability throughout the session.
“Look, I screwed up. I was the CEO of FTX. I say this again and again. That means I had a responsibility. We messed up big,” he said.
But he also spent much of the interview deflecting responsibility, offering explanations for why he shouldn’t be held accountable for FTX customers’ inability to withdraw money.
“I think I was scared, I was nervous, because of the conflict of interest,” he said of his professed ignorance on how Alameda made and financed its trades. But Sorkin pressed him on how this was possible when he even lived with some of the people running Alameda.
FTX owes more than $3 billion to creditors, according to recent bankruptcy filings, and many will try to recover sums in a process that could take years to play out.
When asked where he got the money for his vast political donations, meanwhile, Bankman-Fried said FTX was not the source. “Basically, profits,” he responded.
Bankman-Fried seemed to offer anxious customers a lifeline when he said he believed that FTX.US, the American arm of the company, was currently liquid and that customers could be made whole. But there has been no indication from bankruptcy proceedings that this is the case or that people can expect their money anytime soon.
The former chief executive also sought to contradict the image of “a bunch of kids on Adderall having a sleepover party,” as Sorkin said the common perception had it. Instead, Bankman-Fried described a sober environment of no drugs and little alcohol.
“When we had parties we played board games,” he said.
The session offered an unusual sight: Someone at the center of multiple investigations does not typically appear at a freewheeling public chat. When Sorkin asked if his lawyers were suggesting it was a good idea to be giving interviews, he said, “They’re very much not.”
But Bankman-Fried said he did not want to “recede into a hole” because “I have a duty to explain what happened and I have a duty to try to help [customers].” He did not, however, specify what those efforts entailed.
Bankman-Fried said his personal wealth has been wiped out. He now has one working credit card, he said.
“I put everything I had into FTX,” Bankman-Fried said, denying that he had stashed away any money.
Asked if he had lied in the past, Bankman-Fried said, “I don’t know of times when I lied,” but acknowledged that he was sometimes “acting as a representative, a marketer, for FTX.” He said he often asked himself: “How can I, in a way which is truthful, paint FTX in as compelling a way as possible?”
“I obviously wish I spent more time dwelling on the downside,” he said Wednesday.
The FTX founder’s comments came the same day that the crypto platform Kraken announced a dramatic downsizing. The firm — the third-largest exchange by volume — said it was laying off 1,100 employees, about 30 percent of its staff.
“Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups,” chief executive Jesse Powell wrote in a blog post. “… Unfortunately, negative influences on the financial markets have continued.”
The news arrived as bitcoin, a bellwether of crypto investing, topped $17,000 for the first time since FTX declared bankruptcy nearly three weeks ago. It remains down 16 percent this month.
Also at Wednesday’s DealBook summit, Treasury Secretary Janet L. Yellen said that she “remain[s] quite skeptical” about crypto as an investment and called the FTX bankruptcy the industry’s “Lehman moment,” referring to the bank whose collapse set off a domino effect in 2008.
“This is an industry that really needs to have adequate regulation,” she said. “And it doesn’t.”
Source: WP
