Sam Bankman-Fried Blames ‘Huge Management Failures’ for FTX Collapse
Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, made his first public appearance Wednesday since his business empire imploded this month, insisting that he “did not ever try to commit fraud” and repeatedly saying he didn’t know the extent of what was going on within his crypto businesses.
In a live interview at The New York Times’ DealBook conference, Bankman-Fried blamed “huge management failures” and sloppy accounting for the collapse of his $32 billion company, which has sparked civil and criminal investigations.
Those investigations are focused on whether FTX broke the law by lending its customers’ funds to a trading firm, Alameda Research, which Bankman-Fried also owned. Speaking via a video feed from the Bahamas, where FTX was based, the 30-year-old said he didn’t “knowingly commingle funds.” At another point, he said, “I didn’t know exactly what was going on.”
Bankman-Fried also took responsibility for the collapse. “Look, I screwed up,” he said. “I was CEO.”
FTX disintegrated practically overnight after it was unable to meet a run on deposits that left the company with an $8 billion hole in its accounts. Within a week, the crypto exchange filed for bankruptcy.
Bankman-Fried, who became a billionaire as FTX soared and was viewed as a wunderkind, faces significant legal trouble. The Justice Department and the Securities and Exchange Commission are investigating FTX’s transfer of funds to Alameda.
On Wednesday, Treasury Secretary Janet Yellen called FTX’s collapse a “Lehman moment” for the cryptocurrency industry, referring to the bankruptcy of the Wall Street bank Lehman Brothers at the start of the 2008 financial crisis.
For someone facing possible criminal charges, Bankman-Fried has been
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