In his first public appearance since the November 11th implosion of FTX, Sam Bankman-Fried he claimed to have “made a mess” at the helm of the exchange and that he should have focused more on risk management, customer protection and the links between FTX and the affiliate, Alameda.
“I made many mistakes“, the 30-year-old said on video link to Wednesday New York Times DealBook Summit. “I’d give anything to be able to do it all over again. I have never tried to commit fraud on anyone.
And so the mystery continues to shroud the billions missing from the FTX cryptocurrency exchange after the founder, Sam Bankman-Fried denied attempting to perpetrate fraud while admitting serious management errors.
The participation of Bankman-Fried al New York Times DealBook Summut has been controversial given that there are outstanding questions about how the Bahamas-based FTX ended up with a 8 billion dollars in its balance sheet, and whether it has mismanaged client funds. The reports according to which FTX lent money to Alameda clients for risky trades fueled these concerns.
Interviewed by New York Times journalist Andrew Ross Sorkin, the 30-year-old former billionaire did not give a concrete answer to the question of whether he has ever lied to clients of the crypto platform, FTX.
Bankman-Fried told the Summit that he “did not knowingly shuffle funds.” At the same time, he said FTX and Alameda were “substantially more” connected than expected and that he paid no attention to the trading firm’s “too large” margin position.
Additionally, Bankman-Fried said he didn’t manage Alameda and added he was “nervous about a conflict of interest.” No person was accountable for position risk at FTX, describing the lack of oversight as a mistake.
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The comments shed little light on where FTX’s client funds went, while Bankman-Fried stuck to a difficult-to-analyze account of how Alameda built up large margin positions on the exchange.
The restructuring expert and new CEO of the bankrupt company, John J. Ray IIIpainted a picture of FTX, as a mismanaged, largely out of control, conflict-ridden company lacking basic accounting practices, calling it the worst failure of a control firm he had ever seen.
Additionally, Sam Bankman-Fried will have to deal with the many lawsuits and regulatory investigations into alleged wrongdoing. Some observers speculate that his public comments could be used against him in litigation.
The spotlight has also fallen on an apparent corporate culture of hard work and play. Bankman-Fried said that there was no wild partying and illegal drug use. The former CEO of FTX specified that he has been prescribed drugs to help him maintain attention and concentration.
The potential hacking of the FTX platform also remains an enigma
The billions missing from FTX’s platform aren’t the only conundrum left after Sam Bankman-Fried’s interview. The $662 million outflow from FTX at the time of the bankruptcy announcement remains another unknown. Bankman-Fried said in the Summit interview that there was improper access to FTX’s platform after its spiral.
US Treasury Secretary Janet Yellen, another speaker at the New York Times Summit, called the FTX debacle “the Lehman moment within cryptocurrencies“, referring to the collapse of investment banking giant Lehman Brothers in 2008.
Cryptocurrency markets have stabilized after the November crashes related to the intensifying turmoil around FTX. Even after the recent recovery, the index of the top 100 tokens is down by more than 60% in 2022, hit by the Fed’s monetary policy tightening and a series of cryptocurrency platform bankruptcies, most spectacularly that of FTX.
Bankman-Fried’s wealth at one point reached i 26 billion dollarsand just a few weeks ago it was described as the John Pierpont Morgan of digital assets, willing to throw away his wealth to save the industry. During the interview Bankman-Fried said he only has a credit card and $100,000 in the bank.