Disgraced crypto mogul Sam Bankman-Fried unleashed a wild, wide-ranging interview in which he appeared to shift blame for the collapse of his company FTX to the trading firm run by his ex-girlfriend, Caroline Ellison.
Bankman-Fried is under intense pressure to address his decision to funnel $10 billion in FTX client funds to prop up Alameda Research, where Ellison — a 28-year-old, professed “Harry Potter” enthusiast who has tweeted about taking amphetamines — served as CEO.
Of that money, at least $1 billion in customer funds is still missing.
Bankman-Fried insisted in an interview with Vox reporter Kelsey Piper that his claim FTX didn’t “invest client assets” was “factually accurate” because Alameda Research, not FTX, actually made the investments.
Bankman-Fried added that he “also thought Alameda had enough collateral to reasonable [sic] cover it.”
Bankman-Fried sidestepped the fact that his company FTX Group also owned Alameda Research, and that FTX had transferred the funds used to cover Alameda’s purported risky bets.
Bankman-Fried and Ellison were reportedly part of a group of 10 roommates that controlled operations at FTX and Alameda from a penthouse in the Bahamas.
The group was said to be romantically entangled, with some online speculation asserting they were a “polycule,” or network of polyamorous relationships.
Ellison also sparked scrutiny for a now-viral 2021 tweet in which she talked about “regular amphetamine use.”
FTX faced a liquidity crunch that led to its downfall following a bombshell report that Alameda was the main investor in FTT, a token offered by FTX. The platform quickly ran out of cash as customers scrambled to offload their holdings.
Nevertheless, Bankman-Fried in the interview unleashed a tirade against regulators, called “ethics” a “dumb game we woke Westerners play,” and insisted his biggest mistake was filing for bankruptcy.
“I f—ed up. Big. Multiple times,” the fallen 30-year-old cryptocurrency mogul admitted to Vox reporter Kelsey Piper in a Twitter confessional over which even she admitted being shocked.
“You know what was maybe my biggest single f—up? The one thing everyone told me to do,” he said.
“Chapter 11,” he said, claiming that without bankruptcy, “everything would be ~70% right now if I hadn’t” done it.
“Instead I filed, and the people in charge of [the company] are trying to burn it all to the ground out of shame,” he complained.
Bankman-Fried — who is believed to be hiding out in the Bahamas — blamed “messy accounting” for how his hedge fund, Alameda Research, had borrowed money from FTX’s balance sheet for investments.
“I didn’t realize [the] full size of it until a few weeks ago,” he wrote, saying it “was messier and more organic” than simply lending out customer funds.
“Each step was in isolation rational and reasonable, and then we finally added it up last week and it wasn’t,” he wrote.
He maintained that he “didn’t want to do sketchy stuff.”
“And I didn’t mean to. Each individual decision seemed fine and I didn’t realize how big their sum was until the end,” he said.
“It was never the intention” to get away with it, he said, adding: “Sometimes life creeps up on you.”
Meanwhile, Bankman-Fried admitted that his advocacy for better crypto regulation in Washington was “just PR” — and bluntly dismissed official bodies supposed to protect customers against crooked companies.
“F–k regulators. They make everything worse. They don’t protect customers at all,” he wrote.
He admitted the exchange was genuine, but claimed he thought it was an exchange with a friend and not one that would be posted online.
He then added his own clarifications after Vox published the comments — attempting to walk back his crude assessment of regulators.
“It’s really hard to be a regulator. They have an impossible job: to regulate entire industries that grow faster than their mandate allows them to,” he now wrote, saying some had “deeply impressed me with their knowledge and thoughtfulness.”
“Some of what I said was thoughtless or overly strong — I was venting and not intending that to be public,” he tweeted.
This time, he blamed being “overconfident and careless” after being “on the cover of every magazine, and FTX was the darling of Silicon Valley.”
Now, he said, his “goal — my one goal — is to do right by customers.”
