Former FTX CEO Sam Bankman-Fried: 'I Didn’t Knowingly Commingle Funds'
In a highly anticipated interview at Wednesday’s DealBook Summit, Sam Bankman-Fried expressed regret over his exchange's collapse, but clung to the narrative that it was a bet gone wrong.
The collapse of Sam Bankman-Fried’s FTX empire left customers with missing funds and unresolved questions.
But Bankman-Fried’s highly anticipated Wednesday interview with the New York Times’ Andrew Ross Sorkin didn't answer many of those questions, nor did it deliver the mea culpa many have hoped to hear from the 30-year-old former crypto billionaire.
Bankman-Fried clung to the narrative that FTX’s collapse resulted from an untimely market crash, and maintained that he had not knowingly committed any crimes. He joined the conversation virtually from his residence in the Bahamas, against the advice of his lawyers.
“I didn’t ever try to commit fraud,” Bankman-Fried said.
Bankman-Fried’s FTX.com and FTX US exchanges were once valued at a combined $40 billion, but the entities filed for Chapter 11 bankruptcy protection earlier this month after a CoinDesk story highlighted balance sheet irregularities in FTX's trading arm, Alameda Research. Preliminary court proceedings reveal billions of dollars in FTX customer funds remain unaccounted for.
Bankman-Fried acknowledged becoming nervous after publication of the CoinDesk story on Nov. 2, although he "didn't think it was existential for FTX."
One theory is that Bankman-Fried improperly transferred those funds between the FTX exchange, and Alameda, which squandered them through a series of bad trades. When asked repeatedly by Sorkin whether he improperly took customer deposits and lent them to Alameda, Bankman-Fried said he “didn’t knowingly commingle funds.”
Bankman-Fried attributed the situation to an accounting mistake, saying there was a “substantial discrepancy” between the company’s legitimate audited financials and the figures displayed on the exchange’s faulty dashboards. “I was surprised,” said Bankman-Fried, who fidgeted during the interview and repeatedly looked down at the floor, although he did not appear to be simultaneously playing video games, as he often does during media interviews.
When pressed about the relationship between Alameda and FTX, Bankman-Fried said it had decreased over time.
“I was primarily looking at it from a trading perspective,” said Bankman-Fried, adding that Alameda accounted for only about 2% of FTX’s volume in 2022, down from about 45% of FTX’s volume in 2019. He said the fact that FTX employees lived with Alameda employees did not seem inappropriate.
When asked about his future and whether he had any criminal liability, Bankman-Fried stuttered, “I don’t personally think that ... that’s not what I’m focusing on.”
“There’s going to be a time and place to think about myself and my future,” Bankman-Fried said. “I’ve had a bad month. Right now, that’s not what matters here.”
UPDATE (Dec. 1, 2022, 0:30 UTC): Adds line about Bankman-Fried's nervousness.
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