SBF at NYT DealBook Summit: Billionaire reveals his net worth is ‘nothing’

Disgraced cryptocurrency entrepreneur Sam Bankman-Fried has denied his doomed FTX exchange was run by “a bunch of kids on Adderall having a sleepover party” – insisting he only used medications “on-label” to focus and that he actually wishes he had “been a lot more focused”.

The former billionaire known as SBF, whose net worth was once about $24 billion, claims he now has “close to nothing” left.

The 30-year-old, who is under investigation by authorities in the US and the Bahamas over the sudden collapse of his $US32 billion ($A47 billion) cryptocurrency empire, gave a highly anticipated – and controversial – interview via video-link at Dealbook Summit in New York on Wednesday.

His appearance at the event, hosted by New York Times columnist Andrew Ross Sorkin, came even as the fallout from the FTX bankruptcy continues, amid allegations the exchange secretly funnelled billions of dollars in customer deposits to sister firm Alameda Research to fund risky trades.

In the wake of the collapse, online gossip swirled about the living arrangements of Mr Bankman-Fried and his inner circle, including Alameda CEO Caroline Ellison, with allegations of amphetamine use and a 10-person sexual “polycule” inside the luxury Bahamas penthouse where both companies were based.

Sorkin put it to Mr Bankman-Fried that from the outside, it appeared FTX was run by “a bunch of kids on Adderall having a sleepover party”.

“I mean, look, I screwed up,” he replied.

“I was the CEO of FTX and I say this again and again, that means I had a responsibility for us doing the right thing and we didn’t. We messed up big.”

But he insisted the group was not having wild drug-fuelled parties in the penthouse.

“It’s funny hearing this,” he said.

“I had my first sip of alcohol after my 21st birthday. I have half a glass of alcohol every year. There were no wild parties. We’d play board games, and 20 per cent of people would have three-quarters of a beer each, the rest of us would not drink anything. I didn’t see any illegal drug use around me at the office. Parties [would mean] having people over for dinner.”

He added he “can’t talk about anyone else, what they’re prescribed is between their doctor or their therapist”.

“I have been prescribed various things at various times to help in focus and concentration,” he said.

“I think they have done that. I haven’t felt any of the impacts I think people have been theorising. It’s not a huge impact in the first place. It has all just been totally on-label use of medications and I think things on the margin have helped me focus a little bit. I wish I had been a lot more focused in the last year.”

Dr George K. Lerner, a psychiatrist who served as FTX’s in-house therapist, last month insisted it was a “pretty tame place” and that “they were undersexed, if anything”.

Mr Bankman-Fried was also asked about nearly $US121 million ($A178 million) worth of reported real estate purchases in the Bahamas by himself, his parents and other executives at the platform over the past two years.

The beach house which reportedly lists his parents, Stanford University law professors Joseph Bankman and Barbara Fried, as signatories, was intended as a “vacation home” for the family, according to documents from last June.

“I don’t know the details of that house for my parents but I know it was not intended to be their long-term property,” Mr Bankman-Fried said, adding they intended to return it to FTX. “I think they may have stayed there while working with the company some time over the last year.”

He claimed the rest of the properties were purchased because “we had 100 Silicon Valley employees come here to work for FTX, we were trying to incentivise that to make sure they had an easy way to find a comfortable life so they’d be willing to move”.

During the wide-ranging interview, Mr Bankman-Fried admitted he “made a lot of mistakes” but that he “didn’t ever try to commit fraud on anyone”, insisting he “didn’t knowingly commingle funds” between the two companies.

“I’m deeply sorry about what happened,” he said.

Mr Bankman-Fried acknowledged an “embarrassing” lack of attention to conflict of interest between the two firms, but insisted that he was not abreast of the details on Alameda.

He repeated his claim that it was due to an “accounting mistake”.

“Lots of traders had open margin positions on FTX where they would have borrows on assets where they would be short some assets against other assets as collateral,” he said. “Looking through this now, I think that position size for Alameda got substantially larger over the course of 2022.”

Another reason FTX customers’ funds wound up in the hands of Alameda was because, he claimed, FTX did not have bank accounts for some time from around 2019.

“There were customers who wanted to wire money to FTX, in the meantime some were wiring to Alameda Research to get credit on FTX,” he said.

“I think that was a substantial sum. I think FTX’s internal account did correctly try to debit Alameda for those funds but it didn’t happen in the primary account. It created a discrepancy in the display of the account and what was really going on. I’m still looking into how that worked mechanically but it did make that position size substantially larger.”

He stressed repeatedly that a number of FTX subsidiaries, including FTX US and FTX Japan, were “totally solvent” and that all of their customers “could be whole” if the company administrators allowed them to withdraw.

“I’m confused why FTX US is not processing customer withdrawals,” he said.

Other topics included FTX’s large political donations, with Mr Bankman-Fried denying it was a “partisan exercise”.

“My donations were mostly for pandemic prevention. We were looking at primary elections where there were candidates who were outspoken in favour of doing things now to prevent the next pandemic,” he said.

“It was on both sides of the aisle. We were not looking at donating to one party to beat the other in general elections.”

He said the money for political donations came from “basically profits”.

“You know, it was substantially smaller than the amount of trading profits Alameda had made of the prior few years,” he said.

Mr Bankman-Fried said his lawyers were “very much not” in favour of him speaking out but “I think I have a duty to talk to people to explain what happened”.

Asked if he believed he had any criminal liability, he said that was “not what I’m focusing on”.

“There’s going to be a time and a place for me to sort of think about myself and my own future, but I don’t think this is it,” he said.

“I mean look, I’ve had a bad month … but that’s not what matters here. What matters is the millions of customers, all the stakeholders in FTX who got hurt, and trying to do everything I can to help them out.”

Read related topics:Cryptocurrency

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *