Sam Bankman-Fried Addresses Withdrawals, FTX Collapse in Newly Released Audio Interview

The FTX founder said he unpaused Bahamian FTX withdrawals to “appease” local customers and added his lawyers to the groups of people he said can “go f**k themselves.”

AccessTimeIconNov 29, 2022 at 5:57 p.m. UTC
Updated May 9, 2023 at 4:03 a.m. UTC

Sam Bankman-Fried’s crypto empire blew up in spectacular fashion at the beginning of this month, and questions continue to swirl around the motives and mechanics that caused crypto exchange FTX and its sister company, Alameda Research, to collapse.

Among the more unprecedented elements of the FTX saga has been the fact that Bankman-Fried, who was raised by two lawyers, can’t seem to keep his mouth shut despite mounting legal threats.

After cryptic tweet threads and a viral DM exchange with a Vox reporter in which he said “f**k regulators” and admitted that his philanthropic identity was largely manufactured for PR reasons, Bankman-Fried’s actual voice is being heard for the first time post-FTX collapse with newly released audio from Tiffany Fong – a crypto investor-turned-whistleblower who initially gained attention for leaking audio that showed Celsius Network, the now-bankrupt crypto lending platform, planned to use a cynical “crypto-based solution” to repay users of its Earn Lending platform.

In a phone call with Fong on Nov. 16 – several days after FTX filed for bankruptcy protection – Bankman-Fried rehashed many of the same defenses and rationalizations for his behavior that he had shared previously in other places to explain what went wrong. In general, Bankman-Fried’s defense was (and continues to be) that he greatly mistook how leveraged he was.

This explanation is wholly unsatisfying given that it fails to address precisely how FTX and Alameda misappropriated billions of dollars in FTX user deposits.

“You don’t get into a situation like I got in if you make all the right decisions,” Bankman-Fried admitted once again.

Unhappy lawyers

Unsurprisingly, Bankman-Fried’s lawyers were unhappy with his decision to speak out in the early days of the FTX fiasco.

“You have to promise that you never, ever, ever say you f**ked up again,” Bankman-Fried said his lawyers told him. “I told them to go f**k themselves.”

On the call, Bankman-Fried provided some context around why he – for a brief time after pausing the FTX platform – reopened withdrawals just for residents of the Bahamas, where Bankman-Fried and FTX are based.

Initially, FTX claimed that this was to comply with requests from Bahamian regulators. The Bahamian government disputed that, and, on his call with Fong, so did Bankman-Fried.

“I gave [the Bahamian government] a one-day heads up that we were going to do it. They didn't say, yes or no. They didn't respond, and then we did it. The reason I did it was it was critical to the exchange being able to have a future,” Bankman-Fried said.

“You do not want to be in a country with a lot of angry people in it and you do not want your company to be incorporated in a country with a lot of angry people in it,” he continued. “This was us trying to create a regulatory pathway forward for the exchange just to like kind of appease the citizens of the country that we’re currently in.”

As for whether Bankman-Fried created a “back door” to discreetly move user funds to Alameda without attracting attention, as reported by Reuters, Bankman-Fried suggested that “I certainly didn't build the back door in there and I don't know exactly what they're referring to.”

Bankman-Fried said that he couldn’t have built a back door because “I don’t even know how to code,” though this defense doesn’t really address Reuters’ core claim – which is that he used a back door, not that he built one.

Lobbying under scrutiny

Bankman-Fried was one of the largest donors in this month's U.S. midterm elections, and his once-cozy relationship with politicians and regulators has come under intense scrutiny in recent weeks as it’s become clear that his business empire might have been a fraud.

His sizable donations to Democrats in particular have invited a wave of controversy and conspiracy theories, but Bankman-Fried told Fong that he also made “dark” donations to Republicans that weren't as publicly known.

To explain why he attempted to make these donations without attracting attention, the FTX founder said that most journalists are "secretly liberal," and he just "didn't want to have that fight."

As for why Bankman-Fried continued to speak out rather than remain silent after his house of cards came toppling down, he said that “at the end of the day, I’m starting to trust my gut on things like this,” he said.

Two weeks later, Bankman-Fried is still trusting his gut. Although the Nov. 16 call with Fong is the first time Bankman-Fried's voice has been heard since the start of the FTX/Alameda collapse, he plans to speak with the New York Times columnist Andrew Ross Sorkin at the DealBook Summit on Wednesday.

What went wrong, and Binance's role in the collapse

In a second interview with SBF that Fong conducted on Nov. 20 and released later on Tuesday, Bankman-Fried blamed FTX's meltdown on a perfect storm of events that he nonetheless should have been more prepared for.

"It was a combination of the crash in the spring that took 50% out of asset values, combined with a hyper-correlated crash scenario this month in which simultaneously we saw a 50% decline in relevant asset prices over a two-day period, combined with a complete run on the bank on FTX, combined with the fact that there’s a margin position on FTX that was substantially larger than it appeared to be," Bankman-Fried said.

He continued that "the combination of all of those put together meant that what appeared to be an extremely well-capitalized position on the exchange, over the last six months, became effectively unable to meet its liquidity obligations, and then those were demanded at the same time."

When asked whether he thought FTX would be OK now if Binance's CZ hadn't expressed doubts in the company following CoinDesk's scoop about the instability of Alameda's balance sheet, Bankman-Fried said "it was a good question."

"I think things would certainly be a lot more stable and a lot more ability to generate liquidity, [but] there’d still be too much margin in the system," Bankman-Fried responded. "I think [it's] kind of 50-50."


Bankman-Fried noted that in retrospect he wished there was someone else at the company who was specifically in charge of risk management and liquidity, and that another issue was the company had spread itself too thin. In particular, he said FTX spent an enormous amount of energy on trying to get regulatory licenses, "while we could probably have been more selective on that front and spent less of our time on that."

SBF also said he felt particularly bad for the people who believed in him and trusted him. As for himself, he said “I don’t know what the future holds for me; it’s pretty unclear and it’s certainly not the future I once thought it once was."

CORRECTION (Nov 29, 23:53 UTC): An earlier version of this article incorrectly stated that the interview with SBF was conducted on Nov. 13. It was, in fact, Nov. 16.

UPDATE (Nov 29, 18:14 UTC): Adds additional interview quotes relating to campaign donations.

UPDATE (Nov 29, 23:35 UTC): Adds information from second interview with SBF on Nov. 20.


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