Sam Bankman-Fried Says FTX Had A ‘Bad Month’ But Didn’t Try To Defraud Anyone

"I substantially underestimated what the scale of the market crash could look like," the former cryptocurrency wunderkind said.

Sam Bankman-Fried, the former head of the massive cryptocurrency exchange FTX, said he had a “bad month” but didn’t intend to defraud anyone before the company collapsed earlier this month.

He spoke at The New York Times DealBook Summit on Wednesday, saying he was speaking out about his remarkable downfall against legal advice.

“I did not try to commit fraud on anyone,” Bankman-Fried, appearing via video conference from the Bahamas, told the Times summit. “I was excited about FTX a month ago. … I substantially underestimated what the scale of the market crash could look like and the speed of it.”

The crypto world was stunned in November when FTX, valued at its peak at about $32 billion, effectively imploded overnight, filing for bankruptcy and leaving more than a million creditors behind. Investigators are looking into allegations that FTX used billions of dollars in customer funds to bankroll a sister company, Alameda Research. Those claims began to concern investors in recent weeks, setting off a bank run that led to the collapse and massive questions about how a crypto darling could practically disappear in less than a week.

Bankruptcy filings show FTX owes more than $3 billion to creditors.

Bankman-Fried resigned from his role at FTX and said Wednesday that he had “close to nothing” left, a brisk fall from grace for the 30-year-old mogul who was once hailed by philanthropists, lawmakers and investors as a technologic wunderkind. He personally donated tens of millions of dollars to Democratic causes.

He said Wednesday that he didn’t “knowingly” commingle funds between FTX and Alameda Research, saying that, despite running the company and founding the trading firm, “I didn’t know what was going on.”

“A lot of the things were things I learned over the last month,” Bankman-Fried told the summit. “Look, I screwed up. I was the CEO of FTX. I say this again and again. That means I had a responsibility. We messed up big.”

FTX’s downfall reflects wider concerns about the crypto industry, which surged during the pandemic during a Wild West investment boom with little to no regulation. Treasury Secretary Janet Yellen recently said the fall of FTX was the industry’s “Lehman moment,” saying crypto needed oversight and was now big enough to cause “substantial harm” to investors.

Bankman-Fried said, while he was “shocked” by FTX’s collapse, he was focused on restoring funds to customers.

“I have a duty to explain what happened, and I have a duty to try to help,” he said during the DealBook summit. “What matters here is all the customers and stakeholders that got hurt and to help them out. What happens to me is not the important part.”

Popular in the Community


What's Hot