FTX co-founder and former CEO Sam Bankman-Fried was interviewed at a New York Times conference yesterday, speaking publicly despite the advice of lawyers urging him to remain silent about the collapsed cryptocurrency exchange. As the FTX bankruptcy unfolds and lawmakers urge US authorities to file criminal charges, Bankman-Fried said he did not intentionally commit fraud.
“Clearly I made a lot of mistakes,” Bankman-Fried said. “There are things I would give anything to be able to do over again. I didn’t ever try to commit fraud on anyone. I was excited about the prospects of FTX a month ago. I saw it as a thriving, growing business. I was shocked by what happened this month.” Bankman-Fried also said he “didn’t knowingly commingle funds” with Alameda Research, a related firm that he co-founded and owned a portion of.
Sorkin asked, “What are your lawyers telling you right now? Are they suggesting this is a good idea for you to be speaking?”
“No. They are very much not,” Bankman-Fried answered. “The classic advice, right: Don’t say anything. Recede into a hole. And that’s not who I am. It’s not who I want to be… I have a duty to explain what happened.” He said he wants to help FTX customers, “and I don’t see what good is accomplished by me just sitting locked in a room pretending the outside world doesn’t exist.”
No firm answer on returning to US
“You’re in the Bahamas right now. Are you in the Bahamas because you think you can’t leave?” Sorkin asked.
“I have been in the Bahamas for the last year, and I’ve been running FTX from the Bahamas,” Bankman-Fried replied, saying he’s been in contact “with Bahamian regulators and others” and is “looking to be helpful anywhere I can with any of the global entities that would want my help.”
When asked if he is able to travel to the United States, Bankman-Fried said, “to my knowledge, I could… I would not be surprised if sometime I am up there talking about what happened to our representatives or wherever else is most appropriate.”
Sorkin asked if he is worried about facing criminal charges. “It sounds weird to say it, but I think the real answer is it’s not what I’m focusing on,” Bankman-Fried said. “There’s going to be a time and a place for me to think about myself and my own future. But I don’t think this is it… What matters here is the millions of customers. What matters here is all the stakeholders in FTX who got hurt and trying to do everything to help them out.”
A Bloomberg report on November 15 said, “American and Bahamian authorities have been discussing the possibility of bringing Sam Bankman-Fried to the US for questioning.”
Lawmakers call for criminal investigation
It’s not yet clear whether Bankman-Fried will face criminal charges. Senators Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) last week urged the US Department of Justice to investigate and potentially “prosecute the individuals responsible” for harm to FTX customers. The letter from Warren and Whitehouse pointedly noted that DOJ leaders made a “renewed commitment to investigating and prosecuting white-collar crime earlier this year.”
The senators’ letter pointed to a Bankman-Fried tweet on November 7 saying that “FTX has enough to cover all client holdings” and that it doesn’t invest client assets.
“However, when customers attempted to withdraw deposits, it became clear that Mr. Bankman-Fried and company representatives were lying,” the senators wrote. “In an investor meeting, Mr. Bankman-Fried relented, admitting that Alameda Research, an affiliated trading platform of which he is the founder, owed FTX about $10 billion in customer deposits that were lent without their consent—a violation of both US securities laws and FTX’s own terms of service.”
“I think the world is stunned that he’s not in custody,” US Rep. Warren Davidson (R-Ohio), a member of the House Committee on Financial Services, said on Fox Business during a segment on Bankman-Fried’s interview.