Sam Bankman-Fried: things could have ended far worse

Former FTX chief Sam Bankman-Fried (SBF), in an interview New York Times, repeatedly expressed regret about the collapse of the Bitcoin exchange and acknowledged that events could have unfolded in a more dramatic fashion.

According to him, margin position “was significantly larger than he realised” — “by billions of dollars.” The former FTX chief would have been glad if it had been smaller.

SBF agreed that he had expanded his business interests too rapidly and had missed signs of trouble.

Bankman-Fried declined to provide details, discuss possible imprisonment, or reveal his location, citing security concerns.

He admitted that lately he has slept and played video games that “clear the mind and help him relax.”

“You might think that I would not be sleeping right now, and instead I am sleeping a little,” Bankman-Fried said.

The publication noted that the former billionaire looked “remarkably calm.”

The former FTX chief said that he is working with regulators, the bankruptcy court, and that the firm will do its utmost to serve the interests of customers and shareholders.

When asked about his relationships with colleagues, Bankman-Fried said that he maintained close contact with no more than 15 employees and that he was no longer romantically involved with Alameda Research CEO Caroline Ellison.

According to sources, SBF participated in decisions on large deals. Boundaries between FTX and the trading firm “basically did not exist.” Ellison sat beside monitors displaying the exchange’s trading data, he said.

The former billionaire called the criticism of Binance chief Changpeng Zhao in his talks with regulators a “strategically misguided move.”

On 6 November, the latter decided to divest from the FTX exchange’s FTT utility token. Assets together with BUSD, totaling about $2.1 billion, were the result of the company’s exit from its portfolio investment in the platform.

According to sources, Ellison took the blame for the company’s collapse. She said that Alameda took out loans to fund venture investments. After the market fell in the spring, counterparties demanded repayment. To fulfil obligations, the firm used customer funds from FTX. She said that besides her and Bankman-Fried, two other employees knew about it.

A source for the New York Times confirmed that Alameda Research had an outstanding debt to FTX in the amount of $10 billion, previously reported by The Wall Street Journal citing its own sources.

In response to his thread, in which over several days he wrote the words “I have no idea what happened” in separate letters, the former billionaire said that he was improvising in this way.

In an interview with CoinDesk, one insider described the teams at FTX and Alameda Research as a “gang of kids in the Bahamas.” The company itself was a place full of conflicts of interest, cronyism, and lack of oversight.

Sam Bankman-Fried and his inner circle, consisting of former Jane Street colleagues and MIT classmates, ten people in total, lived in a luxury penthouse in the Bahamas. Many of them were romantically involved. In particular, the former CEO occasionally dated Ellison.

According to former employees, they learned of the company’s problems from CZ’s tweet [Binance CEO Changpeng Zhao] about the purchase of FTX and thought it was a joke. Bankman-Fried kept quiet. He reached out to employees a week after the crisis began, supporting those who wished to leave the company.

“Gary [Wang, FTX CTO], Nishad [Singh, head of development at FTX], and Sam control the code, the exchange-matching engine, and the funds. If they moved them or entered their own data, I’m not sure anyone would notice,” said the source.

Fortune reports that the U.S. Department of Justice has all it needs to bring criminal charges against CEO Sam Bankman-Fried and other executives of the bankrupt exchange.

Earlier, the SEC and the CFTC also began examining the links between FTX and its U.S. subsidiary and Alameda, according to Bloomberg.

The agency deemed it unlikely that customers would recover funds from the bankrupt exchange, whose balance-sheet hole stood at around $8 billion.

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