Sunday, March 3, 2024

Sam Bankman-Fried: “I Never Tried to Commit Fraud”

Former FTX CEO Sam Bankman-Fried (SBF) spoke at length about FTX’s collapse and bankruptcy at the New York Times Dealbrook Summit on Wednesday.

The former billionaire defended himself from accusations of fraud, and claimed that FTX’s troubles stemmed from an accounting error.

Sam Bankman-Fried on Alameda’s Leverage

Bankman-Fried’s interviewer began by asking whether the ex-CEO whether FTX had truly collapsed to an accounting mistake (as claimed by SBF on Twitter) or whether he had committed a “massive fraud.”

“I didn’t ever try to commit fraud on anyone,” he said. “I was shocked by what happened this month.”

Sorkin read SBF a letter from a former FTX customer alleging that he had lost his $2 million in life savings within the now-defunct exchange. Like many, the customer suspected that FTX had loaned his funds to Alameda Research, a trading desk with deep ties to FTX and Bankman-Fried.

Bankman-Fried explained that Alameda Research had more open leverage than he realized – particularly using FTT tokens as collateral.

When the token collapsed by 90% earlier in the month, the trading desk’s margin positions were cleared on FTX Trading, with “no realistic ability for FTX to liquidate that position.” FTX’s new CEO claimed post-bankruptcy that Alameda had been exempted from the exchange’s auto liquidation engine, which applied to other firms.

When asked where FTX got the money to lend Alameda in the first place, Bankman-Fried claimed he did “not knowingly comingle funds.”...

source: https://cryptopotato.com/sam-bankman-fried-i-never-tried-to-commit-fraud//