ex-boss of bankrupt FTX platform apologizes but denies scam

The former boss of the FTX cryptocurrency trading platform said he was “deeply sorry” on Wednesday after the company went bankrupt, but denied committing a scam.

“I am deeply sorry for what happened,” Sam Bankman-Fried said in his first public interview since FTX defaulted.

Caught in a wave of panic that had prompted users to attempt to withdraw their funds from the platform en masse, FTX first suspended withdrawals, before being forced into bankruptcy on November 11.

“I was managing director of FTX, which means that whatever happens, I had an obligation to preserve the interests of shareholders and customers,” admitted the former manager, questioned as part of a New York Times conference.

“I clearly made a lot of mistakes, things that I would give anything to be able to correct today,” continued the 30-year-old, dressed in his usual dark t-shirt.

Sam Bankman-Fried is suspected of having used, with collaborators, funds deposited on the platform by FTX clients to carry out speculative financial transactions with his other company, Alameda Research.

If proven, these facts could lead to criminal prosecution.

According to the Wall Street Journal, at the time of the bankruptcy filing, the sums taken, without express authorization, by Alameda and coming from accounts of FTX customers reached approximately 10 billion dollars.

Several American media have reported that more than a billion dollars of this total is today untraceable.

“I did not seek to commit fraud vis-à-vis anyone,” assured the entrepreneur with thick curly hair, which contributed to his image of iconoclastic genius.

“I did not try to mix funds” and use money belonging to clients to make risky investments without their knowledge, insisted Sam Bankman-Fried, in video duplex from the Bahamas, where FTX is headquartered and where it still resides.

– Risks ignored –

During the interview, Sam Bankman-Fried appeared overwhelmed by events and seemed to have only a very partial view of the underside of FTX’s failure.

“I didn’t run Alameda,” he said, even though he was the main shareholder. “I did not know the size of their position”, that is to say the sum borrowed from FTX, assured this graduate in physics from the prestigious Massachusetts Institute of Technology (MIT).

Sam Bankman-Fried’s successor, John Ray III, in mid-November castigated the management of FTX and described a centrally controlled company “in the hands of a very small group of inexperienced, unsophisticated and potentially corrupt individuals. “.

This is an “unprecedented” case, added Mr. Ray, who nevertheless presided in the past over the ordering of several large bankrupt groups, in particular the energy broker Enron, often considered as a reference on the subject.

Asked about a possible appearance in court, Sam Bankman-Fried explained that he was “(concentrating) not on it”, adding that his lawyers had advised him against speaking publicly.

He said he was more interested in “trying to do everything (his) possible to help” investors and customers of the platform.

By far the most prominent personality in the world of cryptocurrencies, Sam Bankman-Fried embodied for some the future of the sector, especially since he said he was in favor of more regulation.

A time credited with a fortune estimated at 26 billion dollars, entirely based on the valuation of FTX and Alameda, the young man lost everything with the bankruptcy of his platform.

“A lot of what we were doing was a distraction”, which took us away from an “incredibly important subject, on which we totally failed: the risks”, admitted Sam Bankman-Fried.

“Risk management, risks related to customer investments or conflicts of interest”, detailed “SBF”.

FTX’s setbacks have brutally shaken the cryptocurrency universe and prompted several platforms to suspend customer withdrawals.

On Monday, it was the specialist in cryptocurrency loans BlockFi which announced its bankruptcy filing.

The sequence brought to light, like the one that followed, in the spring, the implosion of the digital currency Terra, the interconnection of a number of platforms, which lent themselves to each other often without sufficient guarantees.