Sam Bankman-Fried made his first live public appearance since FTX went out of business on Nov. 3 at the DealBook Summit in New York. He answered a number of questions.
Andrew Sorkin, a reporter for the New York Times, talked to Bankman-Fried via video conference during the hour-long interview, which took place on stage.
They talked about many things, like whether or not FTX and Alameda Research were mixing customer funds, what Bankman-Fried would say to people who had lost everything in FTX, and whether or not he was worried about being held criminally responsible for FTX’s failure.
Related: Lawmakers will ask the head of the U.S. CFTC about the collapse of FTX.
Sam Bankman-Fried spoke at the DealBook Summit put on by the New York Times. The New York Times says so.
Funds are being mixed up.
Bankman-Fried says in one of the earlier parts of the interview that he “unknowingly mixed funds” from Alameda with customer funds at FTX.
In this case, “comingling” meant that customers’ money was deposited with FTX and then loaned to Alameda, which is FTX’s sister company. Sorkin talked about a viewer’s comment that said this happened even though FTX’s terms of service say that customers’ digital assets are not their property but that they will act as if they are.
Sorkin said, “It looks like FTX customers’ funds that weren’t supposed to be mixed with your separate business have been mixed.”
Bankman-Fried, on the other hand, said he didn’t know about the mixed funds and said that bad oversight was to blame.
“I accidentally mixed funds […] “I was surprised by how big Alameda’s position was, which shows that I didn’t keep an eye on things and didn’t name someone to be in charge of that,” Bankman-Fried said. He also said:
But I wasn’t trying to mix money together.
Bankman-Fried also tried to take the blame off Alameda by saying he didn’t know everything that was going on at the company.
“I wasn’t in charge of Alameda, so I wasn’t sure what was going on.” “I didn’t know how big their place was,” he said.
Criminal liability
Sorkin asked Bankman-Fried if he was worried about his criminal liability at this point. The former CEO said that wasn’t his main concern and pointed out:
“I don’t think I have criminal responsibility,” he said, “but the real answer is that’s not what I’m focusing on.”
Bankman-Fried went on to say that even though he had a “bad month,” he wasn’t worried about his own future. Instead, he was focused on doing everything he could to help FTX’s customers and stakeholders.
Later in the interview, he was also asked what his lawyers were telling him and if they thought he should talk to the public.
Bankman-Fried said, “No, not at all,” which made the audience laugh. He then said, “I was told not to say anything,” which is a classic piece of advice.
“I have a duty to talk to people, I have a duty to explain what happened, and I think I have a duty to do everything I can to try to do what’s right,” he said.
Trying to trick the public
When asked when he realized there was a problem at FTX, Bankman-Fried says, “November 6 was when I really knew there was a problem.”
But some people in the community have already pointed out that Bankman-Fried said, in a tweet that has since been deleted, that “FTX is fine” as recently as November 7. “Our assets are fine,” she said, adding that a competitor was “trying to get us by spreading false rumors.”
In another tweet from November 7 that has since been deleted, he said that FTX has enough to cover all client holdings, doesn’t invest client holdings, and will keep processing all withdrawals.
Later in the interview, Sorkin pushed Bankman-Fried on this point, and the former CEO said:
“If you look at November 6, I was worried, but I thought things would probably work out.”
Sorkin also asked Bankman-Fried about the missing funds from the exchange shortly after FTX filed for Chapter 11 bankruptcy. The former CEO of FTX briefly touched on this by saying that he was cut off from FTX’s systems at this point.
Related: Singapore’s Temasek is looking into a $275 million loss that was caused by foreign exchange (FTX).
Then he said, “As far as I know,” and the answer was that the FTX US team and Bahamian regulators had both seized some, and there had been some “actually wrong access” that he couldn’t say more about.
FTX famously fell apart earlier this month when it ran out of money and had to stop customers from withdrawing their money. It then filed for bankruptcy on November 11.
Since he was fired as CEO, the former “white knight” of cryptocurrency has been in a number of news stories.
It is thought that a big part of the liquidity crisis was caused by Alameda using client money to cover loans that were being called back because of the credit crunch caused by LUNA’s collapse.