SBF Rues FTX Bankruptcy Filing As Screws Tighten: Report
Bankman-Fried Says Altruist Persona Was ‘Just PR’ in Wide-ranging Interview with Vox
By: Aleksandar Gilbert •FTX Crisis
Disgraced FTX co-founder and former CEO Sam Bankman-Fried (SBF) said his overtures to regulators and his cultivated image as a do-gooder were “just PR” in an interview with Vox published Wednesday.
The interview, conducted as a series of direct messages on Twitter, featured Bankman-Fried at his most candid since his empire began to unravel a week and a half ago.
Meanwhile, FTX CEO John Ray, a corporate turnaround specialist who assumed leadership of the bankrupt crypto exchange on Friday, put out a statement distancing the company from SBF.
“Mr. Bankman-Fried has no ongoing role at @FTX_Official, FTX US, or Alameda Research Ltd. and does not speak on their behalf,” he said.
Bankman-Fried’s statements to Vox – some of which “appalled” the reporter, Kelsey Piper – come as pressure mounts on the former crypto titan.
FTX confirmed in a bankruptcy filing Tuesday that the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, and “dozens” of federal and state agencies are probing the exchange in connection with its failure last week.
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Meanwhile, a class action lawsuit filed Tuesday alleges FTX and Bankman-Fried violated Florida law, misled customers and cost investors billions of dollars in damages, NBC News reported. The lawsuit names FTX’s celebrity endorsers Tom Brady, Larry David and Stephen Curry as co-defendants.
Bankman-Fried’s exchange with Piper was published as a series of screenshots accompanied by an article in Vox.
In one, he said his “single biggest f!@kup” was filing for Chapter 11 bankruptcy in Delaware.
“[Everything] would be ~70% fixed right now if I [hadn’t],” he wrote. “If I hadn’t done that, withdrawals would be opening up in a month with customers fully whole.”
That scenario, as unlikely as it seems, is still possible if one of his two co-founders return and he wins a “jurisdictional battle vs. Delaware,” he said.
Indeed, securities regulators in the Bahamas are seeking to control FTX bankruptcy proceedings, the Wall Street Journal reported Wednesday.
In his interview with Vox, Bankman-Fried apparently admitted to having defrauded customers.
Pressed about his assertion that FTX never invested customer money, he said it was “factually accurate” – because that money had been loaned to his trading firm, Alameda Research. Alameda, in turn, invested – and lost – that money.
“Thought Alameda had enough collateral to [reasonably] cover [the loan],” he said.
Bankman-Fried is a self-described adherent of effective altruism, an ethical philosophy that recommends philanthropists donate or otherwise contribute in ways that maximize benefit. The FTX Foundation, largely funded by Bankman-Fried, has reportedly donated almost $200M.
Asked whether “the ethics stuff” was “mostly a front,” he replied, “yeah.”
“I feel bad for those who get f!@ked by it,” he continued, “by this game we woke westerners play where we say all the right shibboleths and so everyone likes us.”
Despite lobbying Congress for crypto-specific regulations intended to protect consumers and support the industry, Bankman-Fried admitted to having a dim view of public watchdogs.
“F!@k regulators,” Bankman-Fried wrote Vox. “They make everything worse.”
Asked whether he believes the “good guys” are not, in fact, “good” and that he set out to “make it big and then be the one who gets to decide what ‘good’ is,” Bankman-Fried replied: “There’s *some* truth to it.”
“But it’s *also* true that I didn’t want to do sketchy stuff,” he added, “and I didn’t mean to.”
Hours later, he walked back some of his comments.
“Some of what I said was thoughtless or overly strong–I was venting and not intending that to be public,” he wrote on Twitter Wednesday evening.