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Sam Bankman-Fried says he ‘never tried to commit fraud’

NEW YORK, Nov 30 (Reuters) – Sam Bankman-Fried, the founder and former chief executive of now-bankrupt crypto exchange FTX, sought to distance himself from suggestions of fraud in his first public appearance since the company’s collapse paralyzed investors and confronted creditors . losses totaling billions of dollars.

Speaking via video link at the New York Times’ Dealbook Summit with Andrew Ross Sorkin on Wednesday, Bankman-Fried said he did not knowingly commingle client funds at FTX with funds at his proprietary trading firm, Alameda Research.

“I never tried to commit fraud,” Bankman-Fried said in the hour-long interview, adding that he personally does not believe he has any criminal responsibility.

He also denied knowing the full extent of Alameda’s position on FTX, claiming it surprised him.

The liquidity crisis at FTX came after Bankman-Fried secretly moved $10 billion of FTX client funds to Alameda Research, Reuters reported, citing two people familiar with the matter. At least $1 billion in customer funds had disappeared, the people said.

Bankman-Fried told Reuters in November that the company did not “secretly transfer” but rather misunderstood the “confusing internal labeling.”

FTX filed for bankruptcy and Bankman-Fried stepped down as CEO on November 11, after traders withdrew $6 billion from the platform in three days and rival exchange Binance abandoned a bailout.

“That week, so much happened,” he said.

Bankman-Fried said he was speaking from the Bahamas and that the interview was against the advice of his lawyers. He was seen in the video link talking from a room, wearing a black T-shirt and sometimes drinking from a mug.

FTX is facing a number of investigations. The U.S. attorney’s office in Manhattan in mid-November began investigating how FTX handled customer funds, a source with knowledge of the probe told Reuters. The Securities and Exchange Commission and the Commodity Futures Trading Commission have also opened probes.

Asked if he could come to the United States, Bankman-Fried said he knows and would not be surprised if he traveled to Washington for upcoming congressional hearings on the company’s collapse.

The implosion of FTX marked a stunning fall from grace for the 30-year-old entrepreneur who rode a cryptocurrency boom to a net worth that Forbes pegged a year ago at $26.5 billion. After launching FTX in 2019, he became an influential political donor and pledged to donate most of his earnings to charity.

He said Wednesday that he now has “almost nothing” left and is down to one working credit card with “maybe $100,000 in that bank account.”

Since FTX filed for bankruptcy, Bankman-Fried has distanced himself from the image he projected in media interviews and on Capitol Hill, telling a Vox reporter that his advocacy of a cryptoregulatory framework was “just PR” and his discussions of industry ethics were in at least partially a front.

Bankman-Fried said he was “confused” about why FTX’s US unit, which was included in the bankruptcy filing, does not process customer withdrawals. Redemptions are currently paused for both US and international customers.

“As far as I know, all US clients and all US regulated businesses are here, I think at least in terms of client assets, OK,” he said, adding that derivatives contracts at one of its US subsidiaries were “complete security”.


Bankman-Fried said Alameda had built up a significant position in FTX, and that as digital asset prices fell this year, Alameda became increasingly leveraged to the point of no return earlier this month.

“Realistically, (there was) no way for FTX to be able to liquidate that position and generate everything that was owed,” he said.

He added that he was “not trying to commingle funds,” but said that when FTX did not have a bank account, some customers transferred money to Alameda and were credited to FTX, which likely led to discrepancies.

Bankman-Fried stepped down as CEO of Alameda in October 2021, four years after founding the company, leaving the role to Caroline Ellison and Sam Trabucco, who served as co-CEOs until Trabucco left the firm in August.

Bankman-Fried, for his part, said he regretted focusing on the bigger picture at FTX at the expense of risk management, which he said he paid less attention to over “the last year or two.”

His companies “completely failed” in terms of risk management, he said.

“There was no one person who had the primary responsibility for position risk for customers at FTX, and it feels quite embarrassing in retrospect.”

Reporting by Carolina Mandl and Lananh Nguyen in New York and Manya Saini in Bengaluru; writing by Hannah Lang in Washington; editing by Megan Davies, Deepa Babington and Sam Holmes

Our standards: Thomson Reuters Trust Principles.

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