Former FTX CEO Sam Bankman-Fried Says “We Messed Up Big”

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In an unusual public spectacle for a bankrupt finance mogul, former FTX executive Sam Bankman-Fried on Wednesday tried to appear contrite over the loss of billions of customers, even though he said he had no idea what was going on in a company he founded.

“I did not knowingly mix funds,” Bankman-Fried said in a live-streamed interview with The New York Times, aiming to answer the biggest question about FTX: Did he use money from crypto platform customers to fund transactions at Alameda Research, a sister trading company he created?

“I was not running Alameda. I didn’t know what was going on,” he said. “A lot of things are things I’ve learned in the last month.”

Bankman-Fried made the comments at the Times’ DealBook Summit in New York, where he was interviewed by the newspaper’s columnist Andrew Ross Sorkin. The 30-year-old entrepreneur, who has only given a few audio and print interviews since his once high-flying business collapsed into bankruptcy earlier this month appeared in a black T-shirt from an undisclosed location in the Bahamas, where he lives.

Seeming a little nervous as he sipped the occasional can of La Croix sparkling water, Bankman-Fried referenced personal responsibility throughout the session.

“Look, I screwed up. I was the CEO of FTX. I say it again and again. It means that I had a responsibility. We screwed up big,” he said.

But he also spent much of the interview deflecting responsibility, offering explanations as to why he shouldn’t be held responsible for FTX customers’ inability to withdraw money.

“I think I was scared, I was nervous, because of the conflict of interest,” he said of his professed ignorance about how Alameda made and funded its trades. But Sorkin pressed him on how that was possible while he was even living with some of the people running Alameda.

FTX owes more than $3 billion to creditors, according to recent bankruptcy filings, and many will try to recover sums in a process that could take years to unfold.

When asked where he got the money for his vast political donations, Bankman-Fried said FTX was not the source. “Basically profits,” he replied.

Bankman-Fried seemed to offer anxious customers a lifeline when he said he believed FTX.US, the company’s US arm, was currently liquid and customers could be satisfied. But there is no indication in the bankruptcy proceedings that this is the case or that people can expect to receive their money anytime soon.

The former chief executive also sought to contradict the image of “a bunch of kids on Adderall having a sleepover,” as Sorkin put it according to common perception. Instead, Bankman-Fried described a sober environment with no drugs and little alcohol.

“When we hosted parties, we played board games,” he said.

The session offered an unusual sight: someone at the center of multiple investigations doesn’t usually show up during freewheeling public chat. When Sorkin asked if his attorneys suggested it was a good idea to give interviews, he replied, “They really aren’t.”

But Bankman-Fried said he didn’t want to “get himself into a hole” because “I have a duty to explain what happened and I have a duty to try to help”. [customers].” He did not, however, elaborate on what those efforts entailed.

Sam Bankman-Fried charmed Washington. Then his crypto empire imploded.

Bankman-Fried said his personal wealth was wiped out. He now has a working credit card, he said.

“I put everything I had into FTX,” Bankman-Fried said, denying hiding any money.

When asked if he had lied in the past, Bankman-Fried replied, “I don’t know of the times when I lied”, but acknowledged that he “sometimes acted as a representative, agent marketing, for FTX”. He said he often wondered, “How can I truthfully paint FTX as convincingly as possible?”

“I wish I had spent more time dwelling on the downsides,” he said Wednesday.

The FTX founder’s comments came the same day crypto platform Kraken announced a dramatic downsizing. The firm — the third exchange by volume – said it was laying off 1,100 employees, or about 30% of its staff.

“Since the beginning of this year, macroeconomic and geopolitical factors have weighed on financial markets. This has resulted in a significant drop in trading volumes and fewer customer sign-ups,” Chief Executive Jesse Powell said. wrote in a blog post. “…Unfortunately, the negative influences on the financial markets have continued.”

The news came as bitcoin, a proxy for crypto investing, surged above $17,000 for the first time since FTX declared bankruptcy nearly three weeks ago. It remains down 16% this month.

Also at Wednesday’s DealBook Summit, Treasury Secretary Janet L. Yellen said she “remains[s] quite skeptical” about crypto as an investment and called FTX’s bankruptcy the industry’s “Lehman moment”, referring to the bank whose collapse triggered a domino effect in 2008.

“It’s an industry that really needs proper regulation,” she said. “And it’s not.”

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