Economics/Class Relations

‘I Didn’t Ever Try To Commit Fraud’: Sam Bankman-Fried Responds To FTX Collapse In New Interview

Nicholas Reimann

Updated Nov 30, 2022, 06:49pm EST

Former FTX CEO Sam Bankman-Fried claimed in a live New York Times interview Wednesday the collapse of his cryptocurrency exchange was driven by numerous mistakes on his part rather than fraudulent activity, as FTX faces allegations it wrongly used billions of dollars in customer funds in a failed attempt to prop up its sister trading firm Alameda Research.

Key Facts

Bankman-Fried acknowledged “clearly I didn’t do a good job” as head of FTX, saying there were immense accounting mistakes he should have caught, but he insisted he “didn’t ever try to commit fraud” and was “shocked” by the exchange’s collapse earlier this month.

He also pushed back on concerns that FTX’s ties to Alameda Research were inappropriate, insisting he “wasn’t running Alameda” and “didn’t know exactly what was going on,” even though Bankman-Fried co-founded Alameda, had extensive ties to its leaders and said he worked as a consultant for Alameda “involved in venture investing.”

The disgraced CEO also said he was “not nearly cautious enough” in evaluating the risk of lending to Alameda, claiming he didn’t recognize the “extreme downside perspective” of cryptocurrency.

He said the company “completely failed on” both risk management and “conflict of interest risk,” adding FTX did not have anyone solely in charge of examining the risk customers took on.

In hindsight, Bankman-Fried claimed the company was spending “an enormous amount of our energy on compliance” to get licensed in different jurisdictions, even though FTX’s newly appointed CEO said in a recent bankruptcy court filing, “Never in my career have I seen such a complete failure of corporate controls.”

Bankman-Fried said he had no clear explanation for a suspicious transfer of $515 million of FTX funds after the bankruptcy filing, suggesting it may have been the result of “improper access of assets.”

When asked about his political donations, Bankman-Fried claimed they were sourced from “company profits” and that he gave to both Republicans and Democrats, primarily for what he called “pandemic prevention” (in the 2022 election cycle, Bankman-Fried was one of the largest billionaire donors to Democratic campaigns and organizations).

Bankman-Fried made the remarks Wednesday in a videoconference interview with journalist Andrew Ross Sorkin at the Times’ Dealbook Summit, in his first lengthy public comments since FTX filed for bankruptcy earlier this month.

He said he appeared at the conference despite strong discouragement from his lawyers, stating he believes he has a “duty to explain what happened” and is not “focusing” on potential criminal liability.

Toward the end of the interivew, Bankman-Fried hesitated when pressed on whether he’s been entirely truthful about FTX, ultimately saying, “I don’t know of times when I’ve lied,” though he acknowledged he sometimes acted as a “marketer” and focused disproportionately on the company’s upsides rather than its downsides.

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