Ex-FTX cryptocurrency CEO says he did not “knowingly” misuse client funds

The former CEO of failed cryptocurrency exchange FTX has said he did not “knowingly” misuse customer funds, and he believes his millions of disgruntled customers will eventually recover.

Sam Bankman-Fried’s comments came during an interview with Andrew Ross Sorkin at a conference hosted by the New York Times.

Mr Bankman-Fried has conducted a handful of media interviews since FTX collapsed in mid-November, but Wednesday’s was his first video interview since filing for bankruptcy protection on Nov. 11.

“I never wanted to cheat on anyone. I was shocked by what happened this month,” said Mr. Bankman-Fried.

FTX failed in the cryptocurrency version of a bank run as clients attempted to withdraw their assets at once amid growing doubts about the financial strength of the company and its affiliated trading arm, Alameda Research.

Since its collapse, FTX’s new management has described the cryptocurrency exchange’s management as a “complete failure of corporate controls.”

Mr. Bankman-Fried said that he accepted responsibility for the collapse of FTX and that he failed to grasp the level of risk that FTX and Alameda took on both companies.

One of the allegations against Mr. Bankman-Fried is that he caused Alameda to use customer funds in FTX to place bets on the market.

Mr Bankman-Fried told Mr Sorkin he did not “knowingly” commingle clients’ assets with Alameda.

Exchanges like FTX are designed to segregate customers’ deposits from any bets they place on the markets. Other financial companies have run into legal trouble for abusing customer deposits, an example is MF Global some 10 years ago.

“Whatever happened, why it happened, I had a duty to our stakeholders, our customers, our investors, the world’s regulators, to prove them right,” Mr. Bankman-Fried said.

Mr Sorkin pressed Mr Bankman-Fried on how and when investors will get their money back, after which Mr Bankman-Fried said he broadly believes FTX’s US subsidiary is fully solvent and can begin processing withdrawals immediately.

Referring to the rest of FTX, which was significantly larger than the US division, he said the fate of client funds was largely out of his control at this point.

Mr. Bankman-Fried, who was once one of the richest people in the world on paper, now says he likely has less than $100,000 to his name following FTX’s failure. Even in the Bahamas, he gets by with a credit card.

https://www.independent.ie/business/technology/news/ex-ftx-cryptocurrency-ceo-says-he-did-not-knowingly-misuse-clients-funds-42187583.html Ex-FTX cryptocurrency CEO says he did not “knowingly” misuse client funds

Fry Electronics Team

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