Sam Bankman-Fried: “I Never Tried to Commit Fraud”

Sam Bankman-Fried: “I Never Tried to Commit Fraud”

Former FTX CEO Sam Bankman-Fried (SBF) spoke at duration approximately FTX’s crumble and financial ruin at the New York Times Dealbrook Summit on Wednesday. 

The former billionaire defended himself from accusations of fraud and claimed that FTX’s issues stemmed from an accounting error.

Sam Bankman-Fried on Alameda’s Leverage

The Bankman Fried interviewer asked the former CEO if FTX collapsed due to an accounting error (as SBF claimed on Twitter) or if it committed “massive fraud.” Commit fraud against anyone,” he said. “What happened this month shocked me. Sorkin read SBF a letter from a former FTX client who claimed he had lost his $2 million life savings on the now-defunct exchange. Like many others, the client suspected that FTX had loaned its funds to Alameda Research, a trading arm with close ties to FTX and Bankman-Fried.

Bankman-Fried explained that Alameda Research had more open leverage than anticipated, particularly when using FTT tokens as collateral.

When the token crashed 90% earlier this month, margin trading desk positions at FTX Trading were liquidated “without FTX being able to liquidate that position.” FTX’s new CEO claimed after the bankruptcy that Alameda had been exempted from the exchange’s automated settlement engine that applied to other companies. Funds.” Instead, it highlighted many mistakes he had made about Alameda’s business size.

Did SBF Commit Fraud?

Despite SBF’s claims, Sorkin stood his ground, citing a Wall Street Journal report that Caroline Elison, CEO of Alameda, used FTX client funds to fund margin calls for her company and that Bankman- Fried and Gary, FTX Wang’s director of engineering, knew about it. The claim would align with a Nov. 15 Reuter report showing that Wang built a “backdoor” into FTX that allowed Bankman-Fried to alter the company’s financial records for the purpose responds to this contradiction by again citing a discrepancy between FTX’s audited financials and Alameda’s “dashboard display” of leverage. He also argued that FTX and Alameda had reduced their connections since 2019, accounting for just 2% of the volume of FTX by 2022.

Despite FTX’s woes, Bankman-Fried maintained that FTX US is not insolvent, echoing comments from Tuesday’s interview when she said she regretted filing the US branch for bankruptcy: “As far as I can tell know, that’s fully solvent,” he said. “I think withdrawals could open today, and everyone could recover from that,” he said. The interview ended abruptly after Bankman-Fried was asked about his company’s lack of a CFO.

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