FTX founder Sam Bankman-Fried: ‘Look, I screwed up’

New York
CNN Business
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Sam Bankman-Fried, the 30-year-old founder of the bankrupt crypto exchange FTX, said he “didn’t ever try to commit fraud on anyone,” while admitting he made mistakes as chief executive.

“There are things I would do anything to do over again,” Bankman-Fried said in a virtual appearance at the New York Times’ DealBook Summit in New York. “I was shocked by what happened this month.”

Earlier in November, Bankman-Fried resigned as CEO of FTX after it and dozens of affiliated companies filed for bankruptcy in one of the most stunning corporate implosions ever. Almost overnight, customers around the world were left scrambling to recover billions of funds that they’d deposited on the platform. Bankman-Fried’s own multibillion-dollar personal wealth evaporated. And crypto firms with financial exposure to FTX began to buckle.

One of the key questions surrounding Bankman-Fried is whether FTX, his crypto exchange platform, misappropriated customer funds when it made loans to his hedge fund, Alameda.

“I didn’t knowingly commingle funds,” he said. “I was frankly surprised by how big Alameda’s position was.”

‘I was responsible’ says former crypto CEO after bankruptcy

FTX experienced a run on the bank in early November and quickly collapsed in the midst of a liquidity crunch.

“Look, I screwed up,” he said. “I was CEO of FTX…I had a responsibility.”

Bankman-Fried acknowledged the lack of corporate controls and risk management within the businesses he oversaw, an issue that FTX’s new CEO described in bankruptcy court filings as a “complete failure.”

“There was no person who was chiefly in charge of positional risk of customers on FTX,” Bankman-Fried told DealBook. “And that feels pretty embarrassing in retrospect.”

It’s not yet clear how much, if anything, FTX’s customers will be able to recoup in the restructuring. Bankman-Fried suggested that customers in the US and Japan could be made whole, though he didn’t offer details about how.

Bankman-Fried’s past statements about the state of FTX and Alameda are under close scrutiny as evidence of his lack of oversight comes to light. Early in the liquidity crunch, he tweeted that FTX assets were “fine” and that it had enough to cover client holdings. He deleted the tweet a day later while trying to orchestrate a bailout that ultimately fell apart.

HE acknowledged lack of oversight, raising questions about his knowledge

The collapse of FTX is under investigation by the federal prosecutors for the Southern District of New York, according to a person familiar with the matter, and by authorities in the Bahamas, where the companies were based. Several financial regulators have also been in contact with the firm’s new management, led by restructuring specialists tasked with shepherding FTX through bankruptcy.

Bankman-Fried’s lawyer didn’t respond to requests for comment.

His appearance at the DealBook Summit comes after weeks in which Bankman-Fried has issued several public apologies and comments to the press on the demise of his companies — something that has left legal experts gobsmacked.

“What SBF is doing is a form of litigation suicide,” Howard Fischer, a former Securities and Exchange Commission lawyer said. “Everything he says that turns out to be contradicted by admissible evidence will be taken as evidence of deceit … I don’t know if this is a sign of unrepentant arrogance, youthful overconfidence, or simply sheer stupidity.”

In his interview Wednesday, Bankman-Fried was asked about whether his lawyers were encouraging him to speak out.

“They’re very much not,” he said. “And I mean, you know the classic advice, right? ‘Don’t say anything, you know, recede into a hole.’”

He added: “I have a duty to explain what happened … I don’t see what good is accomplished by me just sitting locked in a room pretending the outside world doesn’t exist.”

He was asked about his personal wealth, which was estimated to be around $26 billion at its peak this past spring. Bankman-Fried said he’d given “everything” to FTX and that he thinks he’s down to $100,000 “or something like that” in his bank account.

—CNN’s Kara Scannell contributed reporting.