Sam Bankman-Fried, the former CEO of the failed cryptocurrency exchange FTX, said Wednesday that he did not “knowingly” misuse customers’ funds, and said he believes his millions of angry customers will eventually be made whole.
Bankman-Fried made the remarks via livestream from the Bahamas, after relocating the company to the island nation in 2021.
“I didn’t know exactly what was going on,” Bankman-Fried reportedly said Wednesday, wearing a black T-shirt and drinking a LaCroix. “I didn’t ever want to commit fraud on anyone. I was shocked at what happened this month.”
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The comments from Bankman-Fried came during an interview with Andrew Ross Sorkin at a conference put on by The New York Times. Bankman-Fried has done a handful of media interviews since FTX collapsed in mid-November, but Wednesday’s was his first video interview since it filed for bankruptcy protection on Nov. 11.
The Times faced widespread mockery for hosting Bankman-Fried.
“In 2008, Bernie Madoff was arrested within 24 hours of his fraud being revealed,” one critic tweeted. “In 2022, Sam Bankman-Fried will be attending the NYTimes dealbook summit after his fraud was revealed.”
Bankman-Fried used the conference to make excuses. “There are things I felt like we needed to do for the business,” he said, according to the Wall Street Journal‘s review of the conference. “There were things that were crucial for us to be able… to get regulated and get bank accounts.”
FTX failed in the cryptocurrency version of a bank run, when customers tried to withdraw their assets all at once because of growing doubts about the financial strength of the company and its affiliated trading arm, Alameda Research. Since its collapse, FTX’s new management has called the cryptocurrency exchange’s management a “complete failure of corporate controls.”
Despite denying knowledge, Bankman-Fried said that he took responsibility for FTX’s collapse and said he failed to grasp the amount of risk FTX and Alameda were taking on across both businesses. One of the accusations made against Bankman-Fried is that he arranged for Alameda to use customers’ assets in FTX to place bets in the market.
Exchanges like FTX are supposed to segregate customers’ deposits from any bets they place in the markets, and Bankman-Fried denied “knowingly” co-mingling the assets. Other financial companies have gotten into legal hot water for misusing customers’ deposits, one example being MF Global roughly 10 years ago.
“Whatever happened, why it happened, I had a duty to our stakeholders, our customers, our investors, the regulators of the world, to do right by them,” Bankman Fried said.
Sorkin pushed Bankman-Fried on how and when investors will get their money back, to which Bankman-Fried alleged that the U.S. affiliate of FTX was entirely solvent and could start processing withdrawals at once. As for the rest of FTX, which was significantly larger than the U.S. division, he said the fate of customers’ funds were largely out of his control at this point.
That’s a very bold promise.
Bankman-Fried, who was once one of the richest people in the world on paper, now says he likely has less than $100,000 to his name after FTX’s failure. He’s getting by on one credit card while still in the Bahamas.
Watch a clip of the conference here —
THE CROWD ERUPTED IN APPLAUSE AS INTERVIEWER THANKS SAM BANKMAN FRIED FOR COMING ON… uhhhhhhh wut. this man is a psychopath criminal who just lied for an hr straight. pic.twitter.com/Y8deKwbc9a
— Coffeezilla (@coffeebreak_YT) November 30, 2022
The best part of Sam Bankman-Fried’s live interview.
Him saying “I’ve had a bad month” and the crowd laughing in the background pic.twitter.com/jXodVrcd7c
— Wall Street Memes (@wallstmemes) November 30, 2022
The Horn editorial team and the Associated Press contributed to this article.