FTX’s Sam Bankman-Fried Reveals He Can’t Account for Billions Sent to Alameda Research

Then CEO of FTX Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee on Capitol Hill, in Washington, on Dec. 8, 2021. Alex Wong/Getty Images

FTX founder Sam Bankman-Fried revealed Thursday that he doesn’t know what happened to billions of dollars that customers of his cryptocurrency exchange sent to accounts of his trading company Alameda Research.

Speaking to the Wall Street Journal Thursday, Bankman-Fried said that the funds “were wired to Alameda, and ... I can only speculate about what happened after that.” FTX customers, he said, deposited more than $5 billion in those Alameda accounts and added that the funds are now gone.

“Dollars are fungible with each other. And so it’s not like there’s this $1 bill over here that you can trace through from start to finish,“ he said. ”What you get is more just omnibus, you know, pots of assets of various forms.”

Later in the interview, the former FTX chief said that he could not rule out whether any of the company’s terms of use were violated.

“I don’t know of a violation of the terms of use,” Bankman-Fried conceded. “I don’t know every line of the terms of use. I can’t confidently say there wasn’t, but I don’t know of one.”

Regulators around the world, including in the United States, are investigating the role of FTX’s top executives such as Bankman-Fried after FTX collapsed in early November. The crypto exchange filed for bankruptcy last month after a liquidity crisis that saw at least $1 billion of customer funds vanish and after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.

Investigations

Prosecutors have not charged Bankman-Fried with any crime. However, he’s faced numerous lawsuits, including one from crypto lender BlockFi, after the company’s stunning collapse.

Federal prosecutors in New York are asking for details on any communications such firms have had with the crypto firm and its executives, including Bankman-Fried, according to Reuters. Other U.S. authorities have sought information from investors and potential investors in FTX.

Meanwhile, the top Democrat and Republican lawmakers on the Senate Banking Committee warned they would issue a subpoena to Bankman-Fried if he won’t testify on the FTX collapse.

“FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry. The American people need answers about Sam Bankman-Fried’s misconduct at FTX,” said Sen. Sherrod Brown (D-Ohio) and outgoing Sen. Pat Toomey (R-Pa.), the panel’s ranking Republican, in a statement Thursday.

A detailed view of the FTX sign prior to a game between the Phoenix Suns and Miami Heat at FTX Arena in Miami, Fla., on Nov. 14, 2022. Megan Briggs/Getty Images

“The Committee has requested that he testify at our upcoming hearing on FTX’s collapse, and will consider further action if he does not comply,” the senators wrote. Bankman-Fried has not publicly responded to the letter.

On Nov. 11, when FTX filed for bankruptcy, lawyers for the firm said it was not able to satisfy numerous customer withdrawals. Alameda also declared bankruptcy.

‘Don’t Want to Talk With Me’

“There are lots of ways that one could have done this in a responsible way,” he told the WSJ on Thursday in retrospect. “Clearly what we did was not one of them.”

But Bankman-Fried told the paper that he did not engage in any fraudulent activity and did not intentionally misuse funds. Since the collapse of the exchange, he’s made similar comments in recent interviews—drawing criticism from other members of the crypto community.

“I ask myself a lot how I made a series of mistakes that seem—they don’t just seem dumb,” said Bankman-Fried, who gave an interview to the paper from his gated-community home in the Bahamas. “They seem like the type of mistakes I could see myself having ridiculed someone else for having made.”

Taking a more somber tone, Bankman-Fried stated: “I pretty much never leave the apartment” and “most of my closest friends and colleagues are not—I think probably don’t want to talk with me right now.”

The Epoch Times has contacted Bankman-Fried for comment about the interview.

Reuters contributed to this report.