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Sam Bankman-Fried Dismisses Implications of FTX Committing Fraud

Bankman-Fried

FTX founder Sam Bankman-Fried defended himself with a new development in cryptocurrency empire investigation. 

He said he “didn’t ever try to commit fraud on anyone.” 

“Clearly, I made a lot of mistakes,” Bankman-Fried stated in virtual attendance at the New York Times’ DealBook Summit. “There are things I would do anything to do over again. I was shocked by what happened this month.” 

In November, Bankman-Fried resigned as chief executive of FTX. This comes after FTX and other related companies filed for bankruptcy. In the blink of an eye, Bankman-Fried’s multi-billion dollar fortune vanished.

FTX-affiliated crypto firms then began to crumble.

There are currently a lot of questions about Bankman-Fried. It includes whether FTX misused clients’ money when it lent money to its hedge fund, Alameda.

“I didn’t knowingly co-mingle funds,” he stated. “I was frankly surprised by how big Alameda’s position was.” 

During the interview, Bankman-Fried admitted responsibility for the collapse of FTX.

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

The young entrepreneur admitted that the company he supervised paid little attention to corporate controls and risk management. Notably, FTX’s new CEO mentioned it in the 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 said in the interview with DealBook. “And that feels pretty embarrassing in retrospect.” 

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Bankman-Fried Downfall

But the company didn’t announce further details about whether FTX’s customers could get back on their feet in the restructuring. Bankman-Fried said it is able to unify US and Japanese customers. However, he didn’t provide specific details on how to do this.

Federal prosecutors for the Southern District of New York are looking into FTX’s collapse, per a source familiar with the issue. Furthermore, authorities in the Bahamas – headquarters of the companies’ location – looks into the case. 

Multiple financial regulators met with the company’s new management. Restructuring specialists are leading the task of guiding FTX through bankruptcy. 

His DealBook Summit appearance comes following weeks of issuing multiple public apologies and statements to the press. It surprised legal experts, though. 

“What SBF is doing is a form of litigation suicide,” former SEC lawyer, Howard Fisher, stated. 

“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.” 

Duty

In an interview Wednesday, the press asked Bankman-Fried if his lawyers had urged him to make those apologies and public statements.

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

He continued: “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.” 

Furthermore, the media queried his riches. It was estimated to be approximately $26 billion during its peak this past spring. 

In response, Bankman-Fried stated that he’d put everything to FTX. In addition, he believes he only has $100,000 “or something like that” in his bank account.

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Photo: Forbes

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