top of page
Comarch_300x600.png
GenerativeAI_728x90 (4).png
TechNewsHub_Strip_v1.jpg

LATEST NEWS

  • Philip Osadebay - Tech Journalist

Sam Bankman-Fried of FTX distances himself from suggestions of fraud

Sam Bankman-Fried, the founder and former CEO of bankrupt crypto exchange FTX tried to distance himself from allegations of fraud in his first public appearance since the company was founded. The collapse of the multi-billion Cryptocurrency exchange FTX shocked investors and left creditors with losses totalling billions of dollars.



Bankman-Fried said he does not knowingly commingle FTX clients' money with that of his trading firm. He also spoke of how he has never tried to commit fraud. He also claimed recently that he has almost nothing and has one active credit card with probably $100,000 in the bank.


FTX's liquidity crisis arose after Bankman-Fried secretly transferred $10 billion of FTX clients' money to Alameda Research, involving two people familiar with the matter. In a press briefing with reporters in November, Bankman-Fried stated that the company had not made a private transfer, but the public had misunderstood its confusing internal memo. At least 1 billion dollars of customer's money was missing, as people claimed.


FTX filed for bankruptcy, Bankman-Fried resigned as CEO on November 11 after traders withdrew $6 billion from the platform in three days, and rival exchange Binance withdrew from a bailout program.


The collapse of FTX meant that the entrepreneur behind the 30-year cryptocurrency boom had a net worth of $26.5 billion a year ago, according to Forbes. Since FTX filed for bankruptcy, Bankman-Fried had distanced himself from his projected image in media interviews. After starting FTX in 2019, he became an influential political donor and pledged to donate most of his earnings to charity.


Bankman-Fried said that Alameda built a significant position in FTX. When the prices of digital assets fell this year, Alameda became even stronger, and there was no turning back earlier this month. Realistically, FTX can not liquidate the such position and create everything that was owed.


When asked about compliance, Bankman-Fried replied that "his companies could not manage risk. No one at FTX was primarily responsible for the risk of the client position, and in retrospect, it seems quite clumsy," he said.


He added that he was "not trying to mix money" but said that when FTX did not have a bank account, some customers transferred money to Alameda, which was credited to FTX, which probably caused the discrepancies.


Bankman-Fried stepped down as CEO of Alameda in October 2021, four years after founding the company, handing the role over to Caroline Ellison and Sam Trabucco. They both served as co-CEOs until Sam Trabucco resigned in August.


Bankman-Fried said he needs clarification on why FTX's US unit is not processing customer withdrawals. Withdrawals are currently suspended for both US and international customers.

In his closing words, he specified that he knows that all the US clients and all the US-regulated firms here are good, at least in terms of client assets and that derivatives contracts at one of his US subsidiaries were completely fulfilled as a guarantee.

Comments


wasabi.png
Gamma_300x600.jpg
paypal.png
bottom of page