Dec 4, 2022 - Economy

FTX's Sam Bankman-Fried: "I screwed up"

Sam Bankman-Fried, the founder and former CEO of FTX, admitted during an interview that aired on ABC's "This Week" Sunday that he had "screwed up" and that he wished he had "done much better" at keeping track of financial exchanges at the company.

Driving the news: Crypto exchange FTX and Bankman-Fried are 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.

  • There have been accusations that Bankman-Fried's hedge fund, Alameda Research, wasn't as profitable as it appeared and that holes in its balance sheet were filled with with client funds from FTX.

What they're saying: "Look, I screwed up. Like I was CEO, I had a responsibility here and a responsibility to be on top of what was going on the exchange. I wish I had done much better at that," Bankman-Fried told George Stephanopoulos in a sit-down interview.

  • "From my understanding there were documents drafted up by legal that [...] that were covering what was happening," he added.
  • "There's a lot of other things going on, and I have sort of a tendency to be involved in many things, to be, you know, spread thin sometimes."

Asked by Stephanopoulos whether using "money from depositors to give to a sister company" constituted the "reddest of red lines," Bankman-Fried replied that there were "explicit mechanisms by which there was allowed borrowing and lending on the platform."

  • "I completely agree that it's in general, like, a huge warning flag and I thought that we had, you know, processes in place that were managing it," he added.
  • "I didn't do nearly as much due diligence on that as I should have, and I really underestimated the risk of what a correlated market crash would look like here, which is also something I should have gotten right."

The big picture: Bankman-Fried last week said a the New York Times Dealbook conference that he "didn't knowingly commingle funds."

  • FTX is working through a messy bankruptcy process and the company's creditors remain in the dark about what, if anything, they will be able to recoup," Axios' Lucinda Shen reports.
  • In an interview with Axios last week, Bankman-Fried admitted that he had $100,000 left in his bank account the last time he checked. His personal wealth at one point was estimated at $26.5 billion.

Go deeper: The week the crypto dream died

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