Former FTX CEO Sam Bankman-Fried Asserts He Did Not Commit Fraud

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Last Updated on December 2, 2022 by Bitfinsider

Mid-November, FTX collapsed when Coindesk uncovered problems in the company’s balance records. On November 11, FTX filed for Chapter 11 bankruptcy protection in Delaware.

“I never attempted to defraud anyone,” Bankman-Fried stated. “I viewed it as a booming business, therefore this month’s events stunned me.”

The political megadonor stated that he was down to $100,000 and had one credit card that was still active.

Bankman-Fried remarked, “We failed miserably at risk.” In retrospect, this feels really humiliating.

Sorkin stated that Bankman-Fried appeared by video link from the Bahamas. Bankman-Fried responded, when asked why he remained on the island country, “I’ve been in the Bahamas for the past year.”

Given the magnitude of Alameda’s borrowing from firms Bankman-Fried wanted to purchase, Sorkin questioned Bankman-Fried what inspired his acquisitions in the cryptocurrency industry.

Bankman-Fried stated that he expected Alameda will have returned all lines of credit to various borrowing offices by the middle of 2022. Nevertheless, Alameda owes BlockFi nearly $670 million, according to court documents. Monday in New Jersey, BlockFi filed for Chapter 11 bankruptcy protection.

“What are your attorneys telling you at the moment? Are they implying that it is a good idea for you to speak?” Sorkin questioned the ex-billionaire.

“I realized there was an issue on November 6,” Bankman-Fried remarked, after Coindesk revealed Alameda’s substantial FTT stake. When we examined the situation, we saw a potentially significant issue.

At that moment, “Alameda had suffered a severe blow” “A run on the bank had begun,” Bankman-Fried stated.

“I was anxious when the Alameda balance sheet was published by Coindesk,” said Bankman-Fried, but he anticipated that the harm would be restricted to Alameda and would not result in a “existential problem” for FTX.

Sorkin inquired as to why FTX and Bankman-Fried had access to consumer funds.

Bankman-Fried stated, “I wasn’t in charge of Alameda, so I didn’t know exactly what was happening or the extent of their position.” “Many of them are things I’ve learnt in the previous month [during the days preceding my bankruptcy],” she said.

According to FTX’s new leadership, Bankman-Fried exerted enormous authority over the whole business.

Sorkin questioned Bankman-Fried about Alameda’s gambling on dubious cryptocurrencies, reading aloud a letter from a $2 million-losing investment.

Bankman-Fried asserted that the U.S. platform is solvent and well-funded. “I feel withdrawals may be opened and made full immediately.”

“Am I permitted to inquire about the drugs?” Sorkin stated.

Bankman-Fried said, “I find this amusing. I consume one-half glass of alcohol annually.

The creator of FTX denied allegations of wild parties and off-label drug usage, stating that FTX events consisted of “board games” and “dinner parties.”

Bankman-Fried claimed ignorance of the Alameda vulnerability. According to him, 40% of FTX’s volume in 2019 came from Alameda. Bankman-Fried asserted that by 2022, this figure had decreased to 2%, leading him to think that FTX’s exposure had diminished.

Sorkin continued to press Bankman-Fried on client asset lending. Bankman-Fried demurred.

“In 2018, FTX did not have bank accounts,” Bankman-Fried explained, explaining why consumers had to send payments to an account in Alameda’s name rather than directly to FTX.

Bankman-Fried has rarely interacted with the media. He told a Vox reporter through Twitter, “F—- regulators.”

“I screwed up,” he added in another Twitter post.

FTX was originally touted as a model of safe cryptocurrency. Regulators and legislators regarded Bankman-Fried as the future of crypto regulation, a reputation Bankman-Fried nurtured through congressional appearances and bolstered by substantial political contributions.

Bankman-Fried was renowned as one of the top Democratic candidate fundraisers. In a recent interview, he stated that he contributed similarly liberally to Republican causes via so-called dark pool contributions.

Bankman-Fried told reporters, “Freak the f—- out if you contribute to the Republicans.”

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