By 
While many of us would have kept a low profile, Sam Bankman-Fried decided to give a prime time interview at the DealBook Summit hosted by the New York Times, against the advice of his lawyers. For the record, prior to Bankman-Fried's live interview, NY Times columnist Andrew Ross Sorkin spoke with a panel of notable figures and respected business leaders, including Meta CEO Mark Zuckerberg, U.S. Treasury Secretary Janet Yellen, BlackRock's Larry Fink and Netflix CEO Reed Hastings. So, Bankman-Fried's interview was not conducted in a small, closed circle of cryptosphere aficionados.
"We screwed up," he said, shaking steadily, sipping from a cup and looking at the floor as he spoke. "I was responsible, ultimately." Bankman-Fried took responsibility for a lack of oversight that he said led to a discrepancy related to risky market positions that Alameda Research, his trading firm, held with FTX, the ruined cryptocurrency exchange platform. SBF said these risky positions were not displayed on the dashboards - that's a bummer - from which the former CEO had worked to assess the creditworthiness of both companies.
When asked whether or not he knowingly committed fraud and illegally commingled client assets to support Alameda, Bankman-Fried flatly denied any deliberate wrongdoing. "I never tried to commit fraud," he said, adding that a month earlier he was "excited about the prospects" of FTX.
In addition, SBF appeared to anticipate his exposure in civil court by disclosing that he only had $100,000 left in his name, in his bank account. A radical reversal from the estimated $20 billion net worth that propelled him into the spotlight a few months earlier.
Recall that he has not yet, officially, been charged with anything, so he appears to be trying to pre-empt potential criminal charges and clear his once heroic reputation. Did he tell the truth? His truth at last? Who knows. For Bill Ackman, the billionaire investor and CEO of Pershing Square Capital Management, SBF is telling the truth. At least that's what he explicitly said on Tweeter "Call me crazy, but I think SBF is telling the truth".
Call me crazy, but I think @sbf is telling the truth.
- Bill Ackman (@BillAckman) November 30, 2022
"Look, I've had a bad month," SBF told the audience, who provided a sitcom-like laugh at the Times event. Incidentally, for the record, the 30-year-old former billionaire, who appeared on screen in his signature black T-shirt, said he didn't take his first sip of alcohol until after his 21st birthday. The packed audience in New York laughed, but for the venture capitalists, institutions and Wall Street firms that had previously opened the capital taps to the crypto-currency - not to mention all of FTX's counterparties and customers - the laughter was yellow when the losses were tallied. To name just two, out of 100,000 creditors, famed investment fund Sequoia Capital left $150 million, and giant BlackRock $24 million invested in FTX before the bankruptcy.
For his role in managing the company's risks, Bankman-Fried said he did not actively manage Alameda to avoid any potential conflicts of interest and did not appoint administrative staff to manage the risks. He said the same thing about his failure to put someone in charge of positional risk for FTX clients.
The claim of poor risk management as a credible excuse does not seem to be enough for some. In fact, Bankman-Fried has denied being involved in any deliberate fraud and has tried to paint the picture of this fiasco as poor risk management rather than a true 3.0 scam.
In an interview with Stephanopoulos for ABC News, SBF says the dedication of his life to FTX "made it pretty hard to have real friendships or close relationships because ... it was really hard for me to find opportunities to talk to people as peers where they would be comfortable and relaxed around me, where nobody had anything to prove. I had very few real friendships."
Did he tell the truth? Well, his truth? There are reasons to remain skeptical. More importantly, whether it's true or not, it helps to draw empathy from the public. For Galaxy Digital CEO Mike Novogratz, "Sam is delusional about what happened and his guilt and will spend time in jail:
"It was delusional. Let's be really clear. Sam was delusional about what happened and his culpability in it," says @novogratz. "He needs to be prosecuted. He will spend time in jail. And it wasn't just Sam. You don't pull this off with one person." pic.twitter.com/0SSh1r8XIL- Squawk Box (@SquawkCNBC) December 1, 2022
Today, Bankman-Fried said he was focusing on the regulatory and legal processes and "trying to focus on what I can do to be helpful." In the future, he said he hopes to be able to say he has made up with everyone who was hurt. In the coming weeks, we'll continue to dissect the collateral damage caused by the fall of FTX, and decipher the juicy twists and turns that revolve around Sam Bankman-Fried.
Below are the two main interviews the former FTX boss gave this week:
Interview 1: New York Times DealBook Summit
The evolution of the Top 20 cryptocurrencies in terms of capitalization over one week.
(Click on the heatmap below to better visualize the variations)
Things to read:
Effective Altruism Pushes Dangerous Brand of "Security and AI" (Wired) North Korea's nuclear program is funded by a stolen cryptocurrency. Could it collapse now that FTX has done so? (The Conversation). The black investors who got burned by Bitcoin (The Atlantic). Will Crypto Survive (Project Syndicate)
