FTX founder Sam Bankman-Fried says he ‘screwed up’ but didn’t commit fraud

“Look, I messed up,” disgraced crypto billionaire Sam Bankman-Fried said Wednesday at a conference in New York, but he claimed he “never tried to commit fraud” and that he had been “shocked” by the collapse of his businesses.

Bankman-Fried, glassy-eyed and visibly shaking at times, appeared via video conference from some nondescript room in the Bahamas. He told the New York Times DealBook Summit that he was “deeply sorry about what happened” but always maintained that he didn’t have a full picture of what was going on in the various branches of FTX, its now bankrupt cryptocurrency exchange, and its offshoots.

Bankman-Fried resigned as head of cryptocurrency exchange FTX when it filed for bankruptcy earlier this month. The real fallout from the collapse is still emerging. FTX owes $3.1bn (£2.57bn) to major creditors, assets gone, law enforcement and regulators running in circles and liberal largesse from Bankman-Fried to the American political elite should cause a firestorm in Washington.

A key question regarding the collapse is whether funds from FTX clients were diverted and given to FTX’s hedge fund, Alameda Research. Asked by New York Times columnist Andrew Ross Sorkin, the 30-year-old seems to blame Alameda.

“I did not knowingly mix funds,” he said. “I was frankly surprised by the size of Alameda’s position.”

When asked if he had behaved like a bank teller who took money from the till at home in the evenings, Bankman-Fried replied: “Look, I didn’t run Alameda and I didn’t know not exactly what was going on and the size of their post. Alameda chief executive Caroline Ellison was reportedly in a relationship with Bankman-Fried.

“Look, I had a bad month. It’s not great,” he told the audience with a laugh. “What matters here is all the customers and stakeholders who have been hurt and helping them. What happens to me is not the important part.

In previous talks at the conference, some of the biggest players in finance have weighed in on the scandal. Larry Fink, chief executive of BlackRock, the world’s largest asset manager, said it looked like FTX’s collapse was the result of not just bad management, but bad behavior. Fink suggested that his company, which had invested $24m (£20m) in FTX, may have received misleading information.

“At this time, we can make all the judgments that there appears to have been misconduct with major consequences,” he told the conference. “Could we have been misled? Until we have more facts, I won’t speculate.

Treasury Secretary Janet Yellen called FTX’s collapse a “Lehman moment” for the crypto industry and described cryptocurrencies as “very risky assets”.

Bankman-Fried’s appearance at the Times’ DealBook summit comes after he gave a series of discursive and sometimes absurd explanations of the circumstances of FTX’s collapse, including blaming “internal mislabeling” of accounts for the company’s $8bn (£6bn) shortfall. assets.

Last week he was fired by top US attorney Paul Weiss after US attorneys for FTX claimed he was disrupting his bankruptcy reorganization efforts with “relentless and disruptive tweets”.

Onstage, he acknowledged that his lawyers were “not at all” suggesting it was a good idea to speak at the conference.

Bankman-Fried, whose personal fortune was estimated at $26bn (£21bn) at his peak, said he had around $100,000 (£83,000) under his belt. When asked if he had been truthful during the interview, he replied, “I was as truthful as possible.”

The U.S. Senate Agriculture Committee has scheduled a Thursday hearing on “Lessons Learned from the FTX Collapse” with Commodity Futures Trading Committee Chairman Rostin Behnam scheduled to appear as a witness. . This will be followed, on December 16, by hearings by the House Financial Services Committee. He said he expects Bankman-Fried to show up.

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