Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Sam Bankman-Fried’s future ‘certainly isn’t the one I once thought it was’ says former FTX head, as Texas court date nears

Published 30/11/2022, 11:45 pm
Updated 01/12/2022, 12:00 am
© Reuters.  Sam Bankman-Fried’s future ‘certainly isn’t the one I once thought it was’ says former FTX head, as Texas court date nears

© Reuters. Sam Bankman-Fried’s future ‘certainly isn’t the one I once thought it was’ says former FTX head, as Texas court date nears

Citizen journalist Tiffany Fong has dropped the second half of her chat with Sam Bankman-Fried following the surprise release of her interview with the disgraced former FTX chief executive on popular YouTuber Coffeezilla’s channel.

Conversation ranged from FTX and Alameda’s connections and the US$8bn funds black hole, to his apparent remorse over the whole situation.

Here are some highlights.

FTX and Alameda

One of the most incriminating aspects of the demise of FTX, formerly the world’s second-largest cryptocurrency exchange, was the alleged backdoor that SBF’s sister company Alameda Research had into customer funds held on FTX.

SBF has since denied knowledge of the funds tap, despite evidence to the contrary.

When asked how user funds from FTX ended up being used at Alameda Research, SBF stated: “I absolutely should have been way more cautious and careful, and I wasn’t.”

SBF expressed accountability (at least at face value) for his failings as head of FTX, though he stuck to the ‘mismanagement’ narrative at odds with what many people see as straight-up fraud.

He also sought to put the blame on declining asset values and a “complete run on FTX” for the exchange’s ultimate collapse.

While SBF has not shied away from the lack of accounting standards and risk management iinherent n FTX and Alameda Research, it remains to be seen what line prosecutors will take if and when charges are brought forward.

Yet SBF didn’t sound like a man overtly concerned about potential criminal repercussions for his actions, even if, as he stated, “I sincerely wish I could take a lot of things back that I did”.

From the waves crashing in the background during his interview with Fong, to his increasing willingness to engage with reporters, he strikes a surprisingly blasé attitude to the calamity surrounding him.

The eight-billion-dollar black hole

A lot has been said about a supposed US$8bn black hole of missing funds that seem to have vanished into thin air.

“What it really is,” according to SBF, is “a significant liquidity hole that (unclear) not enough dollars to fill, you know, all projected withdrawal requests” due to “substantial” margin positions still being open.

He conceded that collateral was not liquid enough to be sold in a reasonable timescale for the withdrawals.

Sam didn’t say what the collateral consisted of, but he may have been referring to the illiquid FTT tokens that he himself minted.

In his creative terminology, assets were fully backed “in theory” despite not being “that liquid, and could not actually be sold off for their… notional value of dollars”.

On Changpeng ‘CZ’ Zhao

Responding to Fong’s query into whether he blamed Binance head Changpeng ‘CZ’ Zhao for FTX’s collapse (CZ's public announcement that he was dumping his entire multi-billion-dollar FTT token supply potentially kickstarted the demise of FTX), SBF said “I don’t know for sure”, but “things would certainly be a lot more stable”.

But he did concede that there were fundamental problems inside his empire and “too much margin in the system” to operate comfortably.

Looking forward

“I wake up each day and think about what happened, and I have like, hours per day to ruminate on it,” SBF said as the end of the interview took a more personal direction.

“Right now I’m mostly focusing on what I can do, and like, where I can be helpful,” he said between deep sighs.

His future “certainly isn’t the one I once thought it was… but my future is not the thing that matters here”. According to SBF, “what matters is the world’s future”.

“Is that your media response or is that really how you feel?" Interjected Fong.

“No it’s exactly how I feel,” he retorted.

Is Sam Bankman-Fried’s remorse genuine? Trial by public opinion will probably determine that.

At the end of the day, in SBF’s own words: “Shit’s complicated.”

Texas Securities Board summons SBF

In what could be the first of many court appearances in his future, Sam Bankman-Fried will soon have to face scrutiny over Securities Act violations before the Texas courts.

In a petition from the Texas State Securities Board, SBF has been served an official notice for a hearing that will commence at 9:00am on February 2, 2023.

The petition is specifically in regards to FTX.US, which gave Texas citizens the opportunity to deposit fiat or cryptocurrencies in accounts that generated yield.

Read more on Proactive Investors AU

Disclaimer

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.