Sam Bankman-Fried Says FTX US Users Will Get 100 Percent of Their Money Back

Sam Bankman-Fried speaks onstage during the first annual Moonlight Gala benefitting CARE, Children With Special Needs, in New York City, on June 23, 2022. Craig Barritt/Getty Images for CARE For Special Children

Sam Bankman-Fried, the former CEO of the bankrupt crypto exchange FTX, has dismissed the notion that users of the platform will not recover anything substantial from the collapsed firm.

In an interview with YouTube commentator Tiffany Fong, Bankman-Fried said that FTX U.S. will get “a dollar on the dollar” and that international users can expect to get “20 to 25 cents on the dollar” as recovery. FTX had filed for bankruptcy in November after concerns about the company’s balance sheet triggered a rush of withdrawals, pushing the firm into a liquidity crisis. According to the company, more than a million creditors might be affected by the collapse.

In another interview with Fong, Bankman-Fried blamed the lack of a person overseeing risk management as a problem faced by the company.

“At the same time, I think, you know, we stretched ourselves too thin. And we’re doing a lot of things at the company—and, you know, I think we should have cut a few of them out and focus more on … the most important things we were doing well at,” he said.

At the New York Times DealBook Summit in New York on Nov. 30, Bankman-Fried said that although his subsidiary companies are spread over numerous jurisdictions around the world, the U.S. subsidiary was “fully solvent” and “fully funded.”

The former FTX CEO stated that “withdrawals could be opened up today and everyone could be made whole from that.”

Bankman-Fried also revealed that his wealth was down to only $100,000, with one active credit card. On Jan. 31, FTX had raised $400 million from investors, with the company valued at $32 billion.

Litigation Suicide

Claiming he was “shocked” at what happened with FTX, Bankman-Fried insisted at the summit that he didn’t “ever try to commit fraud on anyone” and that he made mistakes as the company’s chief executive.

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

When questioned about whether his lawyers encouraged him to speak out, Bankman-Fried said that they had given him the “classic advice” of not speaking anything about the issue.

In an interview with CNN’s Howard Fischer, a former lawyer for the Securities and Exchange Commission called Bankman-Fried’s statements at the summit a form of “litigation suicide.”

“Everything he says that turns out to be contradicted by admissible evidence will be taken as evidence of deceit … I don’t know if this is a sign of unrepentant arrogance, youthful overconfidence, or simply sheer stupidity,” he said.