Sam Bankman-Fried Denies Knowingly Committing Fraud
It is no secret that the FTX collapse has been fascinating to watch. There has always been a societal fascination with major company collapses and FTX hits all the notes of such a story that would capture the public’s attention. Only adding to this fascination is the man at the centre of this scandal, former CEO Sam Bankman-Fried. From being a darling of the crypto sector, Bankman-Fried is not linked to one of its biggest failures.
And amidst all of this, he is not staying silent. On the contrary, Bankman-Fried has spoken out about the collapse and has denied any deliberate fraud.
Bankman-Fried Tries to Clear His Name
On November 30, 2022, Bankman-Fried made an appearance at the New York Times’s DealBook Summit via video-conferencing from the Bahamas. In this appearance, he fielded questions from journalists and tried to defend his part in the current saga.
As he puts it, he was unaware of the size of Alameda Research, the hedge fund arm of FTX. One of the major factors in FTX’s demise was the fact that customer funds were being shifted between FTX itself and Alameda and that the native FTT token was being used as collateral on its own books.
Bankman-Fried, however, says he had limited knowledge of all of this.
“I didn’t knowingly comingle funds. I was frankly surprised by how big Alameda’s position was,” he said.
He was further pressed about his alleged ignorance of the situation and Bankman-Fried doubled down about not knowing the full situation at the time.
“Look, I wasn’t running Alameda and I didn’t know exactly what was going on and the size of their position,” he said, adding, “Look, I’ve had a bad month. This is not great. What matters here is all the customers and stakeholders that got hurt and to help them out. What happens to me is not the important part.”
This statement does not give a lot of information about the issue but rather seems like a defence of Bankman-Fried himself. And he certainly has reason to. Several industry insiders have blamed his leadership style as the cause of the collapse though his admission of not knowing his own company’s full situation is not helping matters.
Also not helping matters is his insistence on speaking publicly about the issue, even against the advice of his legal team. Just last week, he was dropped as a client by US attorney Paul Weiss for endlessly tweeting about the ongoing bankruptcy proceedings.
As many have pointed out, he risks incriminating himself with his statements and digging a deeper legal hole. But he said at the same event that it is his ‘duty’ to speak out.
“The classic advice is ‘don’t say anything, recede into a hole. That’s not who I am, and that’s not who I want to be. I have a duty to talk and explain what happened,” Bankman-Fried has said. Needless to say, this is likely not the last we’ve heard from him.