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“My duty to explain what happened”

He sits there like a bashful boy. Tousled hair. Black t shirt. Often looking down when speaking. From time to time he even begins to tremble. Sam Bankman-Fried, the founder of FTX and Alameda Research, answered probing questions from Andrew Ross Sorkin, one of the USA’s highest profile financial journalists, via video call yesterday, December 30th, at the New York Times Dealbook Summit for more than an hour.

It is the former crypto star’s first proper interview since the world’s second-largest crypto exchange, FTX, crashed in early November 2022. Some see it as one of the “biggest scams of all time.” Over ten billion US dollars will be destroyed. FTX goes bankrupt. Customer assets are frozen. There are allegations of balance sheet falsification, embezzlement of customer funds and money laundering. You can find out all the background information here.

Sam Bankman-Fried is on from the Bahamas, he’s been living there for a year. The conversation gets very emotional. Sometimes also: strange. For example, when Sorkin asks the fallen cryptohero if his lawyers think it’s a good idea for him to do this interview, the room laughs. The 30-year-old’s response: “No, they don’t.” And again: laughter. “I have a duty to explain what happened, to do the right thing – and to help our customers.”

Genuine remorse or an attempt to redeem oneself?

Sorkin sets the framework for the difficult conversation right at the start. There are two readings for the FTX crash: “Either you are a young man who made a series of terrible decisions. Or you’ve committed a massive scam, this is a Ponzi Scheme,” Sorkin said. “What happened?”

I’ve made a lot of mistakes, but I’ve never tried to cheat. A month ago I was excited about the prospects of FTX. I saw it as a thriving, growing business. I was shocked by what happened this month. And as I reconstruct it, there were things I wish I had done differently.

Sam Bankman Fried

From SBF’s point of view, the crash just happened, without intention. He lost track. The reason: Alameda Research, the hedge fund he founded, has built up an ever-larger short position. And that too with customer funds. He himself knew nothing about it.

“I didn’t manage Alameda. I learned from it the moment the crash happened.” “I was surprised at how big Alameda’s position was, which shows a mistake on my part in oversight. But we didn’t try to embezzle client funds.” In addition, he claims that FTX-US, in contrast to the international offshoot, is still completely solvent. “I am confused as to why the funds are not being paid out.”

When asked if he was afraid of prosecution, SBF replies:

That’s not what I’m concentrating on. There will be a time and a place where I can reflect on myself and my own future. This is not the right time. What matters is that I do what I can to help FTX’s millions of customers and stakeholders who have been hurt. I don’t think what happens to me is the most important part.

Sam Bankman Fried

Sam Bankman-Fried says he will turn himself in to authorities and fully cooperate when the time is right. At the end of the interview he even gets applause from the audience for facing this interview.

The reactions to the performance on social media are mixed. “Call me crazy but I think sbf is telling the truth,” tweeted Bill Ackmann, CEO of multi-billion dollar hedge fund Pershing Square. Kevin O’Leary also agrees with the verdict.

However, the majority of the community does not seem to buy the number from SBF. Some take it with gallows humor. So many videos are doing the rounds right now of the sarcastic “I’m sorry” meme from the South Park series, with SBF’s face on it.

“I think it’s pretty stupid that the Financial Times gave me a tougher interview than the New York Times did to Sam Bankman-Fried,” said Cardano founder Charles Hoskinson.

“I just watched the interview and I can’t believe what I saw. I’m speechless at the distortions at work here,” said Bitcoiner David Marcus.

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