Former FTX CEO Says He’s ‘Deeply Sorry,’ but Is Unaware of Any Intention to Defraud Investors

Bankman-Fried says his wealth is down to $100,000 and that he has just one active credit card

Andrew Ross Sorkin and Sam Bankman-Fried on stage at the 2022 New York Times DealBook in New York City on Nov. 30, 2022. Thos Robinson/Getty Images for The New York Times

Appearing at times contrite, at times evasive, former FTX CEO Sam Bankman-Fried told viewers at a New York Times DealBook Summit that he was “deeply sorry about what happened,” referring to the collapse into bankruptcy of his crypto currency exchange and hedge fund in early November, but that he was unaware of any intentional misuses of customer funds.

Host Andrew Ross Sorkin opened their video interview, which Bankman-Fried joined from the Bahamas, with a question from a man named “Andrew,” who claimed to have lost his life savings investing in the FTT crypto currency on the FTX exchange.

“Bankman-Fried stole $2 million from me,” the man stated. “Can you please ask why he decided to steal my life savings, and the $10 billion more from customers to give to his hedge fund, Alameda?” Alameda Research, a now-bankrupt hedge fund, was a sister company to the FTX crypto exchange, both owned by Bankman-Fried, and it is alleged that customer funds flowed freely between the two entities.

Bankman-Fried responded that although his subsidiary companies spanned numerous jurisdictions around the world, the U.S. subsidiary was “fully solvent [and] fully funded, and you know I believe that withdrawals could be opened up today and everyone could be made whole from that.”

Throughout the Q&A, Bankman-Fried stated that he was either unaware of improprieties or made honest mistakes. He frequently avoided eye contact, looking away from the camera or staring at the floor as he spoke.

Improper Use of Funds

Among the charges against his company was that money that customers thought they were investing in crypto currency for their own accounts was in fact being used to fund loans and cover speculative losses at Alameda Research.

“I unknowingly commingled funds,” Bankman-Fried said, adding that he was “frankly surprised” by the extent of risk that some of his subsidiaries had taken with client funds, “but I wasn’t trying to commingle funds.”

Illustration by The Epoch Times. Craig Barritt/Getty Images

When Bankman-Fried was pressed on the fact that managers of both FTX and Alameda were living together, often engaging in intimate relationships, in a luxury Bahamas resort, he responded, “I did live with one or two members of Alameda for a little while, and also say that, you know, as I was, you know, earlier this summer looking at the relationship, and this is a pretty big mistake and oversight of mine.” But he maintained that he wasn’t aware of any intentional malfeasance.

“I wasn’t running Alameda,” Bankman-Fried said. “I didn’t know exactly what was going on. I didn’t know the size of their position. A lot of these things are things I’ve learned over the last month, that I learned as I was sort of frantically digging into this on November 6, November 7, November 8, and obviously that’s a pretty big mistake; that’s a pretty big oversight that I wasn’t more aware.”

Bankman-Fried explained that Alameda received funds from the customers of the FTX exchange because when the exchange was first established, it didn’t have its own bank accounts.

“We were trying to get them; it took us a while, took us a few years,” he said, and in the meantime, customers who wanted to trade crypto on the FTX exchange “were wiring money to Alameda Research to get credited.”

Criminal Charges Ahead?

Bankman-Fried said he is staying in the Bahamas for the time being to assist regulators there in combing through the assets of the various companies to see what funds can be returned to investors. He also revealed that his wealth was down to $100,000 and that he had just one active credit card.

Asked if he was concerned about facing criminal charges, Bankman-Fried replied, “Sounds weird to say, but I think the real answer is, that’s not what I’m focusing on … Like, 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 I can to help them out.”

At the height of his success, Bankman-Fried was hailed as a philanthropist and one of the largest donors to political campaigns and environmental and social causes. In a recent interview, however, he repudiated much of that as “shibboleths” to gain access to influential politicians and key regulators. He is reported to have had a 45-minute phone call with Gary Gensler, chairman of the Securities and Exchange Commission, and to have consulted on aspects of draft regulation of the digital currency market.

Bankman-Fried explained that his cynical remarks to a Vox reporter “were not meant to be a public interview. It was a longtime friend of mine who I stupidly forgot was a reporter.”

The FTX logo and mobile app adverts are displayed on screens on November 10, 2022 in London, England. Illustration by Leon Neal/Getty Images

Among the concerns raised regarding misuse of FTX funds were various real estate purchases that may have been made with customers’ money, including the purchase of a house with FTX money in the name of Bankman-Fried’s parents, Barbara Fried and Joseph Bankman.

“I don’t know the details of the house for my parents,” Bankman-Fried said, “but I knew that it was not intended to be their long-term property, it was intended to be the company’s property. I don’t know how that was papered in, and I think that was, where it was, it will end up I think they may have stayed there, well, working with the company.”

Asked if he had been honest during the interview, Bankman-Fried said, “I was as truthful as I, you know, I’m knowledgable to be.”

Bankman-Fried said he was making his remarks against the advice of his lawyers, given that he might one day be facing criminal and civil charges. After the hour-long conference call, he was greeted with applause from the audience that gathered at the New York Times event. But it was unclear if he was being lauded for his honesty or receiving sympathy for speaking, when his words could potentially be used against him if a trial is in his future.