Nov 30, 2022 - Economy

Sam Bankman-Fried says he didn't "knowingly commingle funds"

Sam Bankman-Fried, speaking at the NYT Dealbook conference Wednesday. Photo: Getty Images.

Sam Bankman-Fried said he didn't commit fraud and didn't try to buy off politicians, fielding live questions at a packed New York City conference less than a month after his company rapidly imploded and filed for bankruptcy.

Why it matters: Bankman-Fried, the founder and former CEO of crypto exchange FTX, is under scrutiny from regulators and politicians over the total lack of oversight at the company, which saw more than $30 billion of value wiped out in a matter of weeks. Customers have seen millions of dollars vanish.

Details: Speaking via webcast at the New York Times Dealbook conference on Wednesday, Bankman-Fried addressed the accusation that the trading firm he controlled, Alameda Research, was improperly moving money in and out of FTX.

  • "I didn't knowingly commingle funds," he said.
  • He added: "I didn't ever try to commit fraud on anyone," and said that FTX didn't buy elections, nor regulators like the Securities and Exchange Commission Chairman Gary Gensler.
  • Bankman-Fried has been a significant contributor to politicians.

Of note: Bankman-Fried, in his signature t-shirt and speaking from the Bahamas, was asked whether the investors and VCs that backed FTX bore responsibility.

  • "I don't think they bear responsibility."
  • He was also asked about the optics behind the fact that not only was venture capital firm Sequoia Partners an investor in FTX, but Bankman-Fried was an investor in the firm as well.
  • "Well after they invested in FTX, there may have been a small investment to some of their funds. It seemed like a good opportunity. Didn't think too much about it," he said.

Zoom in: Bankman-Fried believes certain customers can be made whole, despite the company's bankruptcy and poor bookkeeping.

  • “I think there's a chance customers could be made a lot more whole, I don't know, maybe even fully whole," he said referencing customers in the U.S. and Japan entities.

Context: Prior to the New York Times event, Bankman-Fried was interviewed by Axios, where he said he was down to $100,000 in his bank account, and spoke about his failures as well as continued dedication to effective altruism.

Catch up quick: FTX filed for bankruptcy on Nov. 11 and Bankman-Fried stepped down as CEO, with corporate turnaround veteran John Jay Ray III succeeding him.

  • The newly appointed chief Ray said the crypto exchange's books were a shambles.
  • Meanwhile, Bankman-Fried has been telling his version of the story.
  • "Look, I screwed up," he said on Wednesday. "I was the CEO, and that means I was responsible."

What we're watching: The Senate hearing Thursday with Commodity Futures Trading Commission Chairman Rostin Behnam set to speak about FTX.

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