Sam Bankman-Fried — the 30-year-old dethroned billionaire who fell from grace last month with the failure of his cryptocurrency exchange, FTX, and revelations of missing client funds — was particularly restless, encircled and dumbfounded by his responses, and seemed at times to martyr himself in the long-awaited first public interview after his company, valued at at least $32 billionjust imploded.
“I’ve had a bad month,” Bankman-Fried said at one point, a euphemism that elicited a roar of laughter from the audience at the New York Times’ DealBook Summit, an elite annual conclave of global business leaders, investors, politicians, and celebrities. The former CEO whiz, who had graced magazine covers, mingled with powerhouse players in Washington and funded philanthropic causes before his trade’s stunning collapse, told The New York Times’ Andrew Ross Sorkin he was left with one last credit card and about $100,000 in a bank account.
He also said his lawyers didn’t think it was a good idea for him to speak up. Bankman-Fried said he was given the “classic advice: don’t say anything. Recede into a hole.
“I think I have a duty to talk to people,” she said. “I have a duty to explain what happened.”
What happened was the surprising collapse of the cryptocurrency exchange founded by Bankman-Fried, which sent shock waves not only in financial and crypto circles, but also politic and philanthropic also those. The company, currently in bankruptcy proceedings, is being investigated by the lawyer the Department of Justice and the Securities and Exchange Commission, according to the Wall Street Journal. At least $1 billion in FTX client funds seems to be missing.
Bankman-Fried, who had been seen as a rare billionaire serious about using his wealth to improve the world following a philosophy known as effective altruism, has now left the philanthropic organizations to which he pledged money grappling with funding gaps. FTX’s downfall resulted in “cryptocurrency contagion“across the rest of the industry, ushering in widespread instability: BlockFi, a crypto lending firm that FTX bailed out in July, also filed for bankruptcy this week, and cryptocurrency exchange Kraken announced it will lay off 30% of its workforce. (Disclosure: This August, the Bankman-Fried philanthropic family foundation, Building a Stronger Future, awarded Vox Future Perfect a grant for a 2023 reporting project. That project is now on hold.)
Bankman-Fried no attend Wednesday’s event in person but has been interviewing virtually from the Bahamas, where he has resided since late 2021. When he appeared around 5 p.m., his demeanor was subdued, compared to the frantic, fast-paced energy he’s known for during public appearances.
In introducing Bankman-Fried, Sorkin pulled no punches: “The generous take is that you are a young man who has made a series of terrible, terrible, very, very wrong decisions. The least generous opinion is that you have committed massive fraud. Bankman-Fried’s responses seemed to push for a more generous reading, but their vagueness failed to dispel the audience’s less gracious perceptions.
Bankman-Fried, who is well known for his offbeat aesthetic – he liked to wear baggy shirts and shorts that communicated a kind of asceticism – wore a plain, baggy black T-shirt and sat in an unremarkable room with little more than a visible houseplant in a corner. At various points in the roughly hour-long question-and-answer session, his body language was hunched, head and gaze lowered as he answered a barrage of tough questions from Sorkin, including where had the kids’ money gone? FTX clients, whether employees had used drugs, what he had told his parents, a law professor at Stanford, and what he saw for his future.
At one point, Sorkin referred to a letter he received from someone accusing the former billionaire of stealing about $2 million from him, asking why Bankman-Fried had “decided to steal my life savings.” Did Bankman-Fried think what he did was a fraud?
Bankman-Fried’s head nodded as Sorkin read the letter. “I am deeply sorry for what has happened,” he said before quickly adding that, “to his knowledge,” FTX’s US platform was “completely creditworthy.”
Moments earlier, he said, “I’ve never tried to defraud anyone.”
Bankman-Fried appeared remarkably calm for a man some compare to Elizabeth Holmes and Bernie Madoff. He repeatedly apologized, but claimed he didn’t know the exact details of what happened and why, only that he had failed in his duty as CEO of FTX, while pointing out the lack of oversight and poor risk management. When Sorkin mentioned allegations that FTX employees had used drugs, Bankman-Fried called himself innocent: “I took my first sip of alcohol after my 21st birthday,” he said, and said FTX did not throw wild parties and that if there were parties, the employees played board games.
The DealBook Summit is a self-described space for “misguided conversation about business, culture and politics”. It is organized as an elite gathering of people with the influence to shape the world of finance, business and politics; a regular ticket is priced at $2,499. Among the panoply of famous names in attendance this year were Netflix CEO Reed Hastings, Amazon CEO Andy Jassy, Meta CEO Mark Zuckerberg, and Ukrainian President Volodymyr Zelenskyy.
It has typically been a friendly stage for business leaders, and past respondents include Elon Musk as well as venture capitalists and Republican megadonors Peter ThielApple CEO Tim Cookco-founder of Twitter Jack Dorseyand co-founder and philanthropist of Microsoft Bill Gates. Last year’s virtual summit, however, invited the disgraced WeWork founder Adam Neumann for his first interview about two years after the corporate scandal that tarnished his reputation.
Unlike Neumann, Bankman-Fried didn’t wait two years after his public immolation to do an interview, and it seems he isn’t shy about attracting more attention. Since the collapse of FTX, and ever since allegations of fraud have surfaced a few weeks ago, Bankman-Fried was uncharacteristically chatty on Twitter and with reporters. He was incredibly sincere on Twitter DM interview with Vox reporter Kelsey Piper, pulling back the curtain on the kind of reputation polishing that, as Bankman-Fried implies, all powerful people, including himself, engage in. he bluntly said, on the issue of regulating cryptocurrencies, “fucking regulators” and espoused the view that the world cared more about who they perceived as “winners” than the people who were actually ethical.
Bankman-Fried attempted to clarify and soften some of the comments in that DealBook Summit interview, saying he genuinely cares about important issues like animal welfare and pandemic prevention. But he stuck to the idea that “doing good” was often a PR game that companies played. “There’s a lot of shit that regulated companies do,” he said. “It’s just a PR campaign masquerading as a benefactor.” He acknowledged that he too had participated in such PR campaigns. “Yes. We all did.
Following Bankman-Fried’s Vox interview, current FTX CEO John Ray III (who helped restructure Enron when it went bankrupt) released a short reminder on Twitter that Bankman-Fried no longer spoke on behalf of the company. On Wednesday, however, Bankman-Fried had a lot to say about FTX. Sorkin pressed him on the details of what had happened and what he had learned, asking beforehand whether there had been any mingling of funds between FTX and the trading firm Bankman-Fried had founded, Alameda Research. Alameda was charged to borrow funds from FTX clients. “I have not knowingly mixed funds,” Bankman-Fried replied. He said he belatedly realized that FTX clients’ money and Alameda’s money had been tied together “substantially more” than he would like it to be.
While Bankman-Fried kept repeating that he didn’t know the true financials of either company, Sorkin was blunt: “But, Sam, I think the question is whether you should have had access to these [customer] accounts to begin with.
Bankman-Fried dodged that question, insisting again that he had little involvement in Alameda.
Bankman-Fried’s presence at the summit raised numerous questions: Does hearing a disgraced business leader on such a huge stage help the audience get closer to the truth about what happened? Or does it give some control back to a powerful person, allowing them to trim their own public image and inject an exculpatory spin on the ongoing narrative of FTX and Bankman-Fried himself?
When asked if he had been honest during the interview, Bankman-Fried’s response was a perfect encapsulation of the vagueness and distortion of words he had exhibited during the interview. “I was as honest as, you know, I’m knowledgeable to be,” he said. And then, as if he were rethinking the cover up, he added, “Yes, I was.”
FTX founder Sam Bankman-Fried speaks virtually during his first public interview at the elite New York Times DealBook Summit in New York on Wednesday.Michael M. Santiago/Getty Images
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