24 x 7 World News

‘I didn’t ever try to commit fraud on anyone,’ FTX founder Sam Bankman-Fried says

0

The man at the centre of collapsed cryptocurrency exchange FTX made his first public appearance since the saga began, telling a New York audience on Wednesday that it was never his intention to commit fraud.

Sam Bankman-Fried, the 30-year-old founder of FTX, appeared at the New York Times’ Dealbook Summit on Wednesday, for an interview with journalist Andrew Ross Sorkin about what happened to cause his cryptocurrency firm┬аto collapse into bankruptcy earlier this month.

The firm, once worth more than $32 billion US, entered bankruptcy┬аprotection on Nov.┬а11┬аafter a whirlwind series of days that saw it go from trying to solve a liquidity crunch by merging with a rival, to having that deal fall apart and succumbing to a run on the bank as traders pulled out $6 billion in funds within three days.

Filings show the company owes almost $10 billion to various creditors, and at least $1 billion worth of customer deposits are missing.┬а

Among numerous allegations, customer deposits at FTX appear to┬аhave been used as capital and collateral for loans for an investment firm called Alameda affiliated with him тАФ an allegation that amounts to fraud, and one┬аthat he pushed back against strongly.

‘Deeply sorry’┬а

“I didn’t ever try to commit fraud on anyone,” he told Sorkin, “I didn’t knowingly co-mingle funds.”

While he acknowledged mistakes were made, Bankman-Fried rejected repeated attempts to characterize what happened at his cryptocurrency firm as being in any way malicious┬аor illegal.

“I am deeply sorry about what happened,” he said. “I was excited about the prospects of FTX a month ago, I saw it as a thriving, growing business.”

Bankman-Fried has seen his personal net worth evaporate in the debacle, from more than $26 billion a year ago to “close to nothing” today тАФ and he insisted that he doesn’t have any of the money that has vanished.

“I don’t have any hidden funds here.┬аEverything I┬аhave, I┬аam disclosing,” he said.┬а

“I’m down to one working credit card … [and] hundreds of dollars or something like that, in a┬аbank account.”

WATCH┬а| Former regulator weighs in on FTX debacle:┬а

Former regulatory executive weighs in on FTX collapse

Charley Cooper, a former executive at commodities regulator the CFTC, says the collapse of FTX is a good lesson of the inherent dangers of the cryptocurrency space.

He says,┬аto his knowledge, there are enough funds at FTX to give users their money.┬аBut his hands are tied since he no longer has a formal role at the company since it entered bankruptcy proceedings.

“I believe that withdrawals could be opened up today and everyone could be made whole,” he said.

Bankman-Fried has been active on Twitter since the debacle began, but his appearance on Wednesday marks his first public appearance since the saga began.

There was speculation he was going to appear in person, but ultimately he appeared via video link from the Bahamas, where he lives.

Legal problems

Sorkin asked Bankman-Fried if he did not appear in person because he is worried about being within the reach of U.S. agencies including the Department of Justice and the Securities and Exchange Commission, both of which are probing what happened at FTX.

Bankman-Fried appeared to side-step that question, remarking instead that, to his knowledge, he can still legally enter the U.S.┬а

“I’ve seen a lot of the hearings that have been happening [and] would not be surprised if some time I am out there talking about what happened,” he said, adding that he “does not personally think” he has any criminal liability to worry about.

That being said, he said his┬аlegal team is “very much not” supportive of his decision to appear at the summit and speak publicly about what happened at FTX. His lawyers advice was “to recede into a hole,” he joked.

Leave a Reply