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Disgraced FTX founder Sam Bankman-Fried has for the first time admitted that he spent ‘no time’ managing risk in his crypto exchange because he ‘got a little cocky.’
Bankman-Fried spoke to Good Morning America from his $30 million penthouse in the Bahamas in an interview that aired on Thursday morning – a day after he was grilled at New York Times‘ DealBook Summit by journalist Andrew Ross Sorokin.
In Thursday’s interview, Bankman-Fried made the stunning admission that he ‘wasn’t trying’ to manage risk at FTX, his $32 billion crypto trading firm.
‘I think that there is something even deeper wrong there which is I wasn’t even trying. Like I wasn’t spending any time or effort trying to manage risk on FTX,’ he told GMA.
Bankman-Fried added that if he’d spent ‘an hour a day thinking about risk management’ then his company would not have imploded.
‘I think I stopped working as hard for a bit. You know, honestly if I look back on myself, I think I got a little cocky, I mean more than a little bit and I think part of me like, you know, felt like we made it.’
The former golden boy for cryptocurrency also insisted that he was not aware that customer funds were being funneled into Alameda Research.
Disgraced FTX founder Sam Bankman-Fried has for the first time admitted that he spent ‘no time’ managing risk in his crypto exchange because he ‘got a little cocky’
The 30-year-old continued to insists that he was not aware that customer funds were being funneled into Alameda Research, his trading firm run by his ex-girlfriend
The crypto CEO whose troubled FTX sparked market panic: Hoodie-wearing vegan once worth ‘$25BILLION’ who sleeps four hours a night
Sam Bankman-Fried
Sam Bankman-Fried, a vegan who sleeps four hours a night, had become a public face of crypto money, with a personal fortune estimated at nearly $25 billion, which according to Forbes magazine has since shrunk to $100,00.
The success of FTX allowed the platform to forge prestigious partnerships, notably with American football legend Tom Brady and former supermodel Gisele Bundchen, and it featured comedian Larry David in a Super Bowl television advertisement.
Almost always appearing with a hoodie and a dark T-shirt, Bankman-Fried has pledged to donate almost all of his fortune to his favored causes, like animal welfare and the fight against global warming.
The son of Stanford Law School professors and a graduate of the elite Massachusetts Institute of Technology (MIT), he worked as a broker on Wall Street before turning to cryptocurrencies in 2017.
Bankman-Fried moved the company to the Bahamas, where taxes are almost nonexistent, saying the Caribbean nation is ‘one of the few countries that has a comprehensive licensing regime for cryptocurrencies and cryptocurrency exchanges.’
He has been a vocal advocate for smoother access to the crypto market for the general public, particularly in the United States.
In his interview with GMA’s George Stephanopoulos, Bankman-Fried acknowledged that people saw him as the latest Bernie Madoff, the disgraced financier who ran the a $64.8 billion Ponzi scheme and whose name has become synonymous with fraud.
‘I don’t think that’s who I am at all, but I understand why they’re saying that, Bankman-Fried said about the characterization. ‘People lost money, and people lost a lot of money.
‘I mean at the end of the day, look, there’s a question of what happened and why and who did what, what caused the meltdown. And I think that reads very differently.
‘When you look at the classic Bernie Madoff story, there was no real business there. The whole thing as I understand it, I think, was just one big Ponzi scheme, right? FTX, that was a real business.’
The 30-year-old also appeared to try and dodge questions about what he knew regarding FTX funds being shuffled around to pay debts for Alameda Research, a trading firm founded by Bankman-Fried and run by his ex-girlfriend, Carolyn Ellison.
Bankman-Fried is currently under investigation from the Securities and Exchange Commission and the Commodity Futures Trading Commission over reports he helped funnel $10 million from FTX to Alameda.
While the list of each companies debts remain mostly anonymous, bankruptcy filings revealed that Alameda owed more than $55,000 to Jimmy Buffet’s Margaritaville bar in the Bahamas.
When pushed by Stephanopoulos, Bankman-Fried denied that he knew anything about the alleged misuse of funds.
‘So I can’t speak for who knew what,’ the FTX founder said, noting that there was a provision his company that allowed it to lend and borrow customers’ investments.
‘I was vaguely aware that that was how some wires were being sent in the first place,’ he added of initial fund transfers from FTX to Alameda.
When confronted about his company’s policy that explicitly states that investments would not be loaned out, Bankman-Fried insisted that there was a rule that superseded that policy, but he could not remember it.
The FTX founder said that if he is put under oath, he would ultimately say: ‘I did not know that there is any improper use of customer funds.’
He added: ‘Look, I should have been on top of this and I feel really, really bad and regretful that I wasn’t and a lot of people got hurt and that’s on me,’ Bankman-Fried said.
Bankman-Fried’s ex-girlfriend, Caroline Ellison, the CEO of FTX’s sister company Alameda Research, claimed he knew about the $10 million being funneled between the companies
Bankman-Fried said he was nothing like notorious American financier Bernie Madoff, saying his company was not a Ponzi scheme and that he tried to make it into something
Bankman-Fried noted that he wasn’t entirely worried about serving jail time, and that the ‘world will judge me as it will.’
‘There are a lot of things that are worrying me right now,’ he said. ‘I’m trying to focus on what I can do going forward to be helpful and, you know, let whatever, you know, regulatory and legal processes are happening play out as they will.’
The disgraced businessman noted that his fortune, worth more than $20billion over the summer, is now down to just $100,000.
Bankman-Fried has tried to distance himself from the implosion of FTX, which was once valued at $32 billion but filed for bankruptcy on November 11 after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.
The liquidity crunch at FTX came after Bankman-Fried allegedly secretly moved $10 billion of FTX customer funds to Alameda Research. At least $1 billion in customer funds has vanished, according to Reuters.
Bankman-Fried, who resigned as CEO on the same day as the bankruptcy filing, has claimed that he was not aware of any serious issues until November 6, the same day that Binance CEO Changpeng Zhao announced his company would liquidate holdings of FTX’s in-house crypto token.
Disgraced FTX founder Sam Bankman-Fried spoke via video link at the New York Times’ DealBook Summit on Wednesday night
Andrew Ross Sorkin speaks with FTX founder Sam Bankman-Fried during the New York Times DealBook Summit on Wednesday in New York City
The annual event gathers ‘newsmakers’ across all field of interest, with Sorkin set to tackle the crypto crash with Bankman Fried. Pictured: Sorkin at last year’s summit
Thursday’s GMA interview was aired just a day after Bankman-Fried made his first public appearance at the New York Time’s annual DealBook Summit hosted by Andrew Ross Sorkin.
Like in Thursday’s interview, Bankman-Fried denied the allegations that he knew about the money being funneled through his companies and apologized to investors for the catastrophic collapse of his crypto empire.
‘I was CEO of FTX and that means whatever happened I had a duty to our stakeholders… to do right by them,’ he said.
‘I didn’t do a good job of that, I made a lot of mistakes,’ he added. ‘I did not try to commit fraud on anyone.’
Bankman-Fried, who was spotted last week by DailyMail.com on the balcony of his $30 million Bahamas penthouse for the first time since his empire imploded, also said he is no longer living in the lavish company apartment, which he once shared with nine colleagues.
However, he did say that he was still living somewhere in the Bahamas. Property records show he personally owns a smaller condo, worth up to $2 million, on the north coast of Nassau.
Bankman-Fried denied that he was remaining in the Bahamas, where his country has been based for about a year, to evade the reach of authorities.
‘I’ve thought about coming to the US,’ he said.
Bankman-Fried was spotted last week by DailyMail.com on the balcony of his $30m Bahamas penthouse. He said he no longer lives there but remains somewhere in the Bahamas
Bankman-Fried was also grilled on reports that FTX’s company culture was rife with illicit amphetamine use, and marked by tangled romantic relations between employees.
‘There were no wild parties here, when we would have parties we would play board games,’ he insisted.
‘Twenty percent of people would have a quarter of a beer each and the rest of us would not drink anything,’ said Bankman-Fried.
‘I can’t talk about anyone else,’ he added of drug use, saying that he himself had ‘been prescribed various things at various times to help with focus and concentration’ but had only taken the drugs as prescribed.
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