‘Look, I screwed up’: Sam Bankman-Fried challenged by FTX debacle

Lauren Hirsch

Credit…Hiroko Masuike/The New York Times

FTX founder Sam Bankman-Fried said Wednesday that his parents “take no responsibility” for the collapse of his cryptocurrency exchange and the trading arm he founded, Alameda Research.

“Everyone close to me, including my parents, employees and colleagues, who have worked hard with the company to move forward, have all been hurt by this,” he said. Bankman-Fried said. “They take no responsibility for this. I feel very sad about it. I really appreciate the support my parents have given me through all this.”

Both or mr. Bankman-Fried’s parents are professors at Stanford Law School, and Bankman-Fried has said they had an influence on shaping his ethical framework. Their careers also helped Mr. Bankman, 30, further built his credibility with investors and others as he built his cryptocurrency empire.

gentlemen. At the DealBook Summit, Andrew Ross Sorkin asked Bankman-Fried what he told his parents when his company started to fail this month. FTX was forced to file for Chapter 11 bankruptcy after massive client withdrawals created an $8 billion hole in the company’s balance sheet. gentlemen. Bankman-Fried likened customer churn to a bank run.

“I think I called them up and said, ‘Hey guys, I think there might be a problem, like, it looks like the Alameda position might collapse — there might be a liquidity problem,'” he said.

When asked about the $300 million real estate of FTX and Mr. Bankman-Fried, whose parents reportedly bought property in the Bahamas, said he “doesn’t know the details, but doesn’t intend to make it their long-term property.”

“They probably stayed there while they were working at the company sometime in the past year,” he said of his parents.

As for other immediate personal effects of the FTX crash, Mr. Bankman-Fried said he thought he had a working credit card and had $100,000 left in the bank.

“I don’t have any hidden funds here,” he said.

gentlemen. Bankman-Fried also paints FTX as a docile work culture, ignoring a question from Mr. Bankman-Fried. Sorkin on the alleged drug use of FTX employees. “There were no wild parties. At parties, we played board games. Twenty percent of us would drink a quarter beer each, and the rest of us would drink nothing.”

gentlemen. Bankman-Fried said he has been prescribed “all kinds of things” to help him focus.

“I think they help me focus a little bit,” he said. “Over the past year, I’ve become more focused.”

On the question of whether he lied to clients, investors and regulators: “I’m being honest to the best of my knowledge,” he said.

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