'Could be worse': Disgraced crypto CEO speaks

‘Could be worse’: Disgraced crypto CEO speaks

Sam Bankman-Fried has broken his silence.

After virtual silence apart from a series of cryptic one-letter tweets progressively stating “what happened” over the course of two days, the embattled founder behind the collapsed $32 billion cryptocurrency exchange FTX has finally returned started typing in complete sentences.

Amid criminal investigations in the Bahamas and a possible trip to the US over the disappearance of billions of dollars in client funds, the 30-year-old has again promised to explain everything.

“I come to what happened. But first let’s talk about where we are today,” he tweeted on Tuesday afternoon.”

On Friday, FTX filed for Chapter 11 bankruptcy along with about 130 related companies, including controversial trading firm Alameda Research, which is said to have played a central role in the implosion.

FTX is said to have secretly transferred up to $10 billion ($14.8 billion) in customer funds to Alameda to fund risky cryptocurrency deals ahead of the collapse, which came after rumors of a liquidity crunch led to it Customers rushed to withdraw their money.

Fears only started to mount after that CoinDesk reported that Alameda was heavily invested in FTT, a token issued by FTX. According to that FinancialTimesFTX had less than $1 billion ($1.48 billion) in cash and cash equivalents versus $9 billion ($13.3 billion) in liabilities before it went bankrupt.

Mr Bankman-Fried (known as SBF) wrote on Twitter: “To the best of my knowledge, after November 7th with the potential for failure, Alameda had “more assets than liabilities”. Market, “(but not liquid)”.

He added that Alameda has a margin position with FTX International and that FTX US has “enough to pay back all customers,” but that “not everyone agrees.”

“My goal — my only goal — is to do the right thing for customers,” he said. “I contribute what I can. I personally meet with regulators and work with teams to do what we can for clients. And then investors. But first the customers.”

He reiterated in another tweet that his goal is to “clean up and focus on transparency” and “make customers whole.”

The latest tweets come after Mr Bankman-Fried spoke to him The New York Times for a lengthy article published on Monday that was widely criticized for its sympathetic tone.

“He sounded surprisingly calm in a wide-ranging interview on Sunday that spanned midnight,” wrote journalist David Yaffe-Bellany. “‘You would have thought that I’m not getting any sleep now, and instead I’m getting some,’ he said. ‘It could be worse.'”

The article states that Mr. Bankman-Fried “expressed numerous regrets over FTX’s collapse” but “offers only limited details on the key issues swirling around it,” including whether FTX is offering billions of dollars misused customer funds.

He said The New York Times that Alameda had built up a large “margin position” on FTX, which essentially meant it had borrowed funds from the exchange.

“It was a lot bigger than I thought it would be,” he said. “And indeed, the downside risk was very high.”

Economist Alex Kruger was among many readers and industry insiders to call the article a “poof.”

“Disgraceful @nytimes coverage of FTX,” he tweeted.

“It portrays SBF as a charitable entrepreneur gone under and never mentions the words fraud, crime, drug abuse, friends and family Bahamas KYC goons, hack, stolen funds, or wiped servers.”

He added: “The NYT Author @yaffebellany wrote about SBF as if he were writing a cozy article in the lifestyle section instead of covering the Bernie Madoff succession.”

Zcash co-creator Zooko Wilcox agreed, writing, “Disgusting complicity on your part The New York Times. He has ruined the lives of countless people through theft and fraud and NYT now helps him delay or evade justice by whitewashing him in her prestigious, influential newspaper. I doubt this is just a fault on their part.”

Jesse Powell, co-founder and former CEO of Kraken Exchange wrote: “The MSM must take account of its role in contributing to the legitimacy and high status of this insolvent Ponzi. Without the support of the media and the endless dandelions, the victims would not have been as trusting with their savings. Even now they downplay the story.”

Apparently referring to media attacks on himself and Coinbase, he added: “At the same time as they were pumping the FTX scam, they were writing defamatory gossip articles about industry giants and driving their audiences away from safe, reliable and proven venues. It’s too generous to call these people clowns. They betray their duty.”

Mr. Bankman-Fried faces intensified investigations from prosecutors and regulators in both the United States and the Bahamas, where the MIT graduate launched the doomed operation with a “cabal” of roommates from a luxury $40 million penthouse -Dollar ($59 million).

He was questioned by Bahamas police over the weekend Bloomberg reported on Tuesday that US and Bahamian authorities had discussed the possibility of bringing him to America for questioning.

It came as the Bahamas Supreme Court appointed PwC provisional liquidators to oversee FTX’s assets. In Australia, KordaMentha was appointed as the voluntary administrator of the local FTX subsidiary on Friday. The Securities and Exchange Commission suspended FTX Australia’s financial services license on Wednesday.

“ASIC is closely monitoring this situation and speaking regularly with international regulators and external administrators,” the Australian Securities and Investments Commission said in a statement.

Meanwhile, contagion from FTX’s collapse continues, and cryptocurrency lender BlockFi braces for a possible bankruptcy filing. The Wall Street Journal reported on Tuesday.


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