Sam Bankman-Fried's bizarre apology tour goes prime time

Quick Take

  • In a live, prime-time broadcast, former FTX CEO Sam Bankman-Fried described the murky relationship between the crypto exchange and trading firm he founded, Alameda Research.

  • He spoke during a widely anticipated interview with the New York Times’ Andrew Ross Sorkin.

Many in his position would have likely laid low, but disgraced crypto entrepreneur and one-time billionaire Sam Bankman-Fried is nothing if not unusual.

In another surprising twist, Bankman-Fried moved into the live phase of his apology tour on Wednesday, giving a prime-time interview to the New York Times, admittedly against his lawyers' advice.

“We messed up big,” he said, oftentimes visibly shaking, sipping seltzer or looking down at the ground as he spoke. “I was responsible, ultimately." The interview comes after risky positions and the apparent commingling of assets between the firms saw millions of customers defrauded and billions of dollars in losses for investors.

Bankman-Fried took responsibility for a lack of oversight that he said led to a discrepancy regarding risky market positions Alameda Research held with FTX, which he said were not displayed on dashboards the former CEO had been working from to gauge the two firms’ solvency.

However, when probed over whether or not he knowledgeably committed fraud and illegally commingled customer assets to back Alameda, Bankman-Fried flatly denied any willful wrongdoing. “I didn’t ever try to commit fraud,” he said, adding that a month prior he was “excited about the prospects” for FTX.

Failure of risk management 

Comments from Bankman-Fried come amid an ongoing bankruptcy proceeding for FTX, as authorities continue to investigate the nature of the relationship between Alameda Research and the now-capsized exchange.

Embroiled in the fallout of the defunct trading firm and exchange are users who cannot withdraw digital assets as well as a number of crypto lending platforms and companies with assets under the management of, or otherwise exposure to, FTX and Alameda Research. The rapid decline of the companies also impacted wider digital asset markets, as some liken it to crypto’s version of Enron or the collapse of Lehman Brothers.

For his role in the matter, Bankman-Fried said he had not actively managed Alameda to avoid any potential conflict of interest, and failed to appoint administrative staff to manage risk. He said the same of his failure to put someone in charge of the positional risk of FTX customers.

The claim of faulty risk management as a credible excuse doesn’t appear to be cutting it for some. “He denied that he was involved with any criminal activity and tried to paint the picture that this fiasco was solely the result of poor risk management rather than outright fraud,” said Sam Callahan, a bitcoin analyst at Swan Bitcoin, adding that, from his perspective, Bankman-Fried “played the embarrassed, innocent, and clueless founder to perfection.”

Others were much kinder in their assessment. “Call me crazy, but I think SBF is telling the truth,” tweeted billionaire investor and Pershing Square Capital Management CEO Bill Ackman.

Before Bankman-Fried’s live interview, the New York Times’ Andrew Ross Sorkin spoke to a wide range of notable figures and respected business leaders including Meta CEO Mark Zuckerberg, U.S. Treasury Secretary Janet Yellen, BlackRock's Larry Fink, Netflix CEO Reed Hastings and actor Ben Affleck.

Crypto's Lehman moment

While Bankman-Fried granted live interviews to the New York Times and ABC News, FTX’s new chief executive John Ray told the company’s employees earlier this week that Bankman-Fried is not involved in day-to-day operations. Although he has been deposed as FTX’s leader, it is likely that Bankman-Fried is still the company’s largest shareholder despite accumulating losses of around $8 billion.

During her time on stage Yellen called the collapse of Bankman-Fried’s FTX “a Lehman moment” for the digital asset industry. “It’s a Lehman moment within crypto, and crypto is big enough that you’ve had substantial harm [to] investors … and that’s a very bad thing,” she said.

Besides Bankman-Fried saying that the largest number of those wronged by his actions were FTX customers, he also said that not only have those close to him been hurt, but that he had had a hard time coping as well. “I’ve had a bad month,” he said.

While the live audience laughed, on Twitter some users took offense. “It sounds so disconnected from reality, really disgusting to watch,” wrote Julien Bouteloup, founder and CEO at Stake Capital Group.

Toward the end of the unusual live interview, the one-time toast of the crypto world was asked if he had been truthful with his answers. 

“I was as truthful as I, as, you know, I’m knowledgeable to be,” he said.

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