FTX chief Sam Bankman-Fried says he ‘screwed up’ but rejects fraud claim

Disgraced chief executive tells summit he ‘didn’t knowingly commingle funds’ with FTX’s sister company Alameda Research

“Look, I screwed up,” the fallen crypto billionaire Sam Bankman-Fried told a conference in New York on Wednesday, but he maintained he “didn’t ever try to commit fraud” and was “shocked” by the collapse of his businesses.

With glassy eyes, at times visibly shaking, Bankman-Fried appeared via video conference from a nondescript room in the Bahamas. He told the New York Times DealBook summit he was “deeply sorry about what happened” but consistently said he did not have a full picture of what was going on within the various branches of FTX, his now bankrupt cryptocurrency exchange, and its offshoots.

Bankman-Fried resigned as head of the FTX cryptocurrency exchange when it declared bankruptcy earlier this month. The true fallout of the collapse is still emerging. FTX owes $3.1bn (£2.57bn) to its largest creditors, assets have disappeared, law enforcement and regulators are circling and Bankman-Fried’s free-handed largesse to the US political elite is set to cause a firestorm in Washington.

In another interview, broadcast on Thursday morning, Bankman-Fried told ABC: “I wasn’t spending any time or effort trying to manage risk on FTX.” He “stopped working as hard for a bit” before the firm’s implosion, he said.

One key question about the collapse is whether FTX’s customers’ funds were misappropriated and given to FTX’s hedge fund Alameda Research. Questioned by New York Times columnist Andrew Ross Sorkin, the 30-year-old appeared to shift blame to Alameda.

“I didn’t knowingly commingle funds,” he said. “I was frankly surprised by how big Alameda’s position was.”

Asked if he had behaved like a bank teller who took the cash from the till home in the evening, Bankman-Fried said: “Look, I wasn’t running Alameda, and I didn’t know exactly what was going on, and the size of their position.”

Alameda’s chief executive, Caroline Ellison, had reportedly been in a relationship with Bankman-Fried.

“Look, I’ve had a bad month. This is not great,” he told the audience, to laughter. “What matters here is all the customers and stakeholders that got hurt and to help them out. What happens to me is not the important part.”

In earlier interviews at the conference, some of finance’s biggest players weighed in on the scandal. Larry Fink, chief executive of BlackRock, the world’s largest asset manager, said it appeared FTX’s collapse was the result of not just mismanagement but bad behavior. Fink hinted that his firm, which had $24m (£20m) invested in FTX, may have been given misleading information.

“Right now, we can make all the judgment calls that it looks like there was some misbehavior of major consequence,” he told the conference. “Could we have been misled? Until we have more facts, I will not speculate.”

The treasury secretary, Janet Yellen, said the FTX collapse was a “Lehman moment” for the crypto industry and described cryptocurrencies as “very risky assets”.

Bankman-Fried was interviewed by ABC’s George Stephanopoulos at his home in the Bahamas this week. In the interview, the former chief executive was asked about his risk management at FTX.

“I think that there is something maybe even deeper wrong there, which was I wasn’t even trying, like, I wasn’t spending any time or effort trying to manage risk on FTX,” Bankman-Fried said.

“If I had been spending an hour a day thinking about risk management on FTX I don’t think that would have happened. I think I stopped working as hard for a bit, and honestly, if I look back on myself, I think I got a little cocky – I mean, more than a little bit – and I think part of me like felt like we’d made it.”

Asked if he was worried about going to jail, Bankman-Friend said: “There are a lot of things that are worrying me right now. As best as possible, I’m trying to focus on what I can do, going forward, to be helpful, and, you know, let whatever regulatory and legal processes are happening play out as they will.”

His appearance at the DealBook summit came after he gave a series of discursive and sometimes nonsensical explanations for the circumstances of FTX’s collapse, including blaming “poor internal labeling” of accounts for the company’s $8bn (£6bn) shortfall in assets.

Last week, Bankman-Fried was dropped by the leading US law firm Paul, Weiss after lawyers for FTX claimed he was disrupting its bankruptcy reorganization efforts through “incessant and disruptive tweeting”.

On stage, he acknowledged his lawyers “were very much not” suggesting it was a good idea to be speaking at the conference.

Bankman-Fried, whose personal fortune was estimated at $26bn (£21bn) at its peak, said he had about $100,000 (£83,000) to his name. Asked if he had been truthful in the interview, he said: “I was as truthful as I’m knowledgeable to be.”

The US Senate agriculture committee has scheduled a hearing for Thursday on “Lessons Learned from the FTX Collapse” with commodity futures trading commission chair Rostin Behnam scheduled to appear as a witness.

That will be followed, on 16 December, by hearings by the House financial services committee. It has said it expects Bankman-Fried to appear.

  • This article was amended on 1 December 2022 to correct the name of the Paul, Weiss law firm.


Edward Helmore and Adam Gabbatt in New York

The GuardianTramp

Related Content

Article image
Ex-crypto mogul Sam Bankman-Fried out on $250m bail after extradition from Bahamas
FTX founder must remain under strict supervision at parents’ California home, judge says

Edward Helmore in New York and Alex Hern in London

22, Dec, 2022 @6:57 PM

Article image
Sam Bankman-Fried’s $40m Bahamas penthouse reportedly up for sale
Entrepreneur at center of FTX scandal put luxury residence up for sale the same day crypto exchange filed for bankruptcy

Edward Helmore

14, Nov, 2022 @7:17 PM

Article image
FTX founder Sam Bankman-Fried charged with defrauding investors
SEC says investigation into other alleged misconduct by former CEO of cryptocurrency exchange is ongoing

Dominic Rushe in Washington, Kari Paul in Oakland, Alex Hern in London and Edward Helmore in New York

13, Dec, 2022 @11:08 PM

Article image
FTX’s Sam Bankman-Fried to testify before Congress next week
Founder and former CEO says he could talk about what he thinks led to crash and ‘my own failings’

Dan Milmo Global technology editor

10, Dec, 2022 @12:26 AM

Article image
Sam Bankman-Fried and other FTX staff allegedly had ‘Wirefraud’ chat group
Chat group on the platform Signal was reportedly used to send end-to-end encrypted information about FTX and its hedge fund

Ed Pilkington

13, Dec, 2022 @3:32 PM

Article image
FTX billionaire Sam Bankman-Fried funneled dark money to Republicans
The crypto entrepreneur was thought to be a big donor to Democrats but now acknowledges he gave equally to GOP

Dominic Rushe

30, Nov, 2022 @5:20 PM

Article image
Fraud, cons and Ponzi schemes: did Sam Bankman-Fried use Madoff tactics?
The fallen crypto mogul is fighting off accusations he followed a similar playbook to Madoff – and deceived investors in the process

Edward Helmore

17, Dec, 2022 @7:00 AM

Article image
Associates of Sam Bankman-Fried plead guilty to fraud charges after FTX collapse
Carolyn Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX, said to be cooperating with investigators

Alex Hern and agencies

22, Dec, 2022 @10:25 AM

Article image
Trump, Bankman-Fried and Musk are the monsters of American capitalism | Robert Reich
For them, and for everyone who still regards them as heroes, there is no morality in business or economics. The winnings go to the most ruthless

Robert Reich

24, Dec, 2022 @6:00 AM

Article image
FTX was run as ‘personal fiefdom’ of Sam Bankman-Fried, court hears
Hearing in Delaware bankruptcy court is the first since the cryptocurrency exchange declared bankruptcy earlier this month

Dominic Rushe

22, Nov, 2022 @6:24 PM