FTX Founder Denies Committing Fraud In First Public Appearance Since Bankruptcy

The founder and former CEO of the bankrupt cryptocurrency exchange FTX, Sam Bankman-Fried tried to deny that he had committed fraud. He made his first public appearance this week since FTX's collapse stunned investors and left creditors facing losses totaling billions of dollars.

Speaking at the Dealbook Summit this week, Bankman-Fried said he did not knowingly mix client funds on the FTX platform with funds from proprietary trading firm Alameda Research.

FTX’s liquidity dried up after Bankman-Fried secretly transferred $10 billion of FTX’s client funds to Alameda Research, people familiar with the matter said. This resulted in the loss of at least $1 billion in client funds.

Bankman-Fried argued that the company did not "steal" funds but simply misread "confusing internal labels".

On November 11, FTX filed for bankruptcy and Bankman-Fried resigned as CEO. Previously, traders withdrew $6 billion from the platform in three days, while rival Binance also dropped a deal to rescue FTX.

"By the evening of Nov. 6, we put all the numbers together," Bankman-Fried said. "Obviously, that's part of the monitoring cap that I'll keep watching. When we look at the numbers, there's really There is a serious problem." He also said that he "never attempted to commit fraud" and that he personally does not believe he has any criminal responsibility. "The real answer is, that's not my focus. I'll have my own time and place to think about myself and my future."

The FTX debacle quickly dimmed the 30-year-old entrepreneur. A year ago, Forbes estimated Bankman-Fried's net worth at $26.5 billion thanks to the cryptocurrency boom. After launching FTX in 2019, he also became an influential political donor and pledged to donate most of his proceeds to charities.

Since FTX filed for bankruptcy, Bankman-Fried's image to the outside world has taken a 180-degree turn. He told reporters that his support for a regulatory framework for cryptocurrencies was “just for PR purposes.” His discussion of ethics in the industry is at least partly a cover.

Bankman-Fried also said he was "confused" as to why FTX's U.S. entity did not process customer withdrawals. Currently, withdrawals for FTX US and international clients are suspended.

“As far as I know, all U.S. clients and U.S. regulated businesses have at least no problem with client assets,” he said, adding that the derivatives contracts of one of FTX’s U.S. subsidiaries are “fully collateralized.”