Despite plenty of professional (and unsolicited) advice to the contrary, Sam Bankman-Fried just won’t stop talking. Whether the hole that the disgraced crypto titan finds himself in is merely reputational or legal and financial, he’s now eagerly grabbed a shovel offered up by New York Times columnist Andrew Ross Sorkin, who interviewed him live at the newspaper’s DealBook conference on Wednesday.
It’s been just weeks since Bankman-Fried’s once-massive crypto exchange FTX—as well as the crypto hedge fund he founded, Alameda Research—went belly-up after a series of apparently heavily leveraged bets, troubles in the broader crypto ecosystem, and reports on the unseemly financial intermingling between the two ostensibly independent companies. Resignations and Chapter 11 filings followed; FTX customers were left wondering what happened to the $10 billion they had stored with the company in total, and whether they would ever get any of it back. At the same time, salacious reports about workday drug use, an alleged intra-C-suite polycule, and almost cartoonishly flippant risk-taking have helped make the FTX implosion one of the biggest stories in the world.
Understandably, most of the most prominent people involved in FTX and Alameda have laid low—but not Bankman-Fried. After posting his way through the events that led his companies to file for bankruptcy, he’s continued to post through the fallout, making some weird confessions along the way. He’s still on a media tour, too. On Monday evening, he suggested to an Axios reporter that his formerly gargantuan personal fortune may have shrunk to a “negative number” and that he has no idea where FTX’s assets are. On Tuesday, crypto enthusiast Tiffany Fong released audio of a phone call she’d had with SBF on Nov. 16, in which the well-known Democratic donor stated that he’d used dark money to quietly funnel donations to Republican campaigns, that he never understood the technical aspects of his businesses, and that he’d told his lawyers “to go fuck themselves.” On Thursday afternoon, after Good Morning America airs a conversation Bankman-Fried had with George Stephanopoulos, he will join a Twitter Space with crypto executive Mario Nawfal. At some point, he’ll also join a Twitter Space with a YouTuber named Bitboy Crypto. Pretty packed schedule, but it’s not like he has a company (or two) to run anymore.
Yet the most anticipated SBF booking was his long-scheduled appearance at the New York Times’ DealBook Summit, where he was the last panelist of the day to speak with Andrew Ross Sorkin. He showed up on a video call from somewhere in the Bahamas, where FTX is based. How’d it go? Well … not too well. Sorkin went after his esteemed guest with blunt questions and pointed follow-ups, and clips of Bankman-Fried’s responses have flown around social media, accompanied by nonstop mockery and skepticism. SBF didn’t quite veer from his message—that he’s very sorry for his mistakes, that he didn’t know FTX was as disastrously exposed to Alameda as it turned out to be, and that he did not “knowingly” commingle the two companies’ funds—but it doesn’t seem to be doing him many favors.
Here are some takeaways from the wincing, teeth-gritting conversation.
When I said your money was fine, I really meant it: One motif of Bankman-Fried’s public statements has been his attempts assure to some very angry customers that everything’s OK. As FTX faced the crypto equivalent of a bank run earlier this month, he tweeted that the exchange’s assets were “fine,” before deleting that tweet and filing for bankruptcy. Sorkin explicitly asked about that tweet and whether it was a lie. (Bankman-Fried said he never knowingly lied.) Over the course of the talk, SBF kept alluding to FTX outposts in the U.S. and Japan, saying these two branches were “fully solvent,” that he was “not sure” why they weren’t currently trading (the international branch of the company is now being steered by the executive who managed the Enron collapse), and that all his customers could ultimately be “made whole” much sooner than later—something he may be alone in believing could really happen. Bankman-Fried has expressed regret about filing his companies for bankruptcy, but he’s never elaborated on just how any of his furious customers could get their stacks of money back. One reassuring example he proffered at DealBook was the Bitfinex fallout: “It got hacked and then ended up making, over a few-year period, customers whole.” That’s not at all what happened with Bitfinex’s customers, but whatever. And that leads into …
Look, I didn’t know anything, promise! Bankman-Fried also emphasized that he had little to no knowledge of the underlying issues with FTX and Alameda. If anything, he said, it was all on the latter that it took billions in FTX customer funds without his knowledge—even though he founded and owned both firms, lived with Alameda employees (including the firm’s CEO, an ex-girlfriend) even after claiming to have stepped away from the hedge fund, and allegedly signed off on some of the FTX-Alameda transfers and positions. This wouldn’t be the first time he’s tried to shift blame to Alameda and the people he says were in charge there.
Sorkin asked SBF whether he had intended to use one company to help prop up the value of the other, as well as how Alameda was able to borrow the holdings of FTX customers without their knowledge and in apparent violation of the terms of service. Bankman-Fried kept waffling between statements of acknowledging that he’d seen the balance sheets (“I think that the position size of Alameda [in FTX] got substantially larger over the course of 2022 … but it had in some ways been reducing”) and that he was unaware of how bad the situation was (“A lot of these are things that I’ve learned over the last month. … I was nervous because of the conflict of interest about being too involved”). Sorkin inquired whether Alameda and FTX had improperly close ties: “Yeah. … If not in intention, it was, in effect, tied together substantially.” But they’d been tied together going back years, right? “When you scroll back to 2019, Alameda and FTX were very connected in a number of ways. One of these was that Alameda was the primary liquidity provider on FTX, 40-something percent of volume.” So, you were just hoping that the commingling of the two corporations’ assets would just work out? “Not how I viewed it.”* And you had actual collateral for all this money? “Clearly I was not cautious at all.”
Don’t call it a “party”: A bit after Sorkin inquired about how SBF’s companies appeared to be run by “a bunch of kids who were on Adderall having a sleepover party” in the Bahamas, Bankman-Fried insisted he only has “roughly half a glass of alcohol a year” and that “parties” at the mansion mainly consisted of dinners, board games, and only quarter-full beers (which were consumed by “20 percent” of attendees). As for the drugs: “I’ve been prescribed various things at various times to help with focus and concentration. … I haven’t felt any of the sort of impacts that people have been theorizing.”
The call of duty: Sorkin asked about the legal counsel SBF had received with regard to speaking at events like, say, a prominent newspaper’s live event. “The classic advice is ‘don’t say anything, recede into a hole.’ That’s not who I am,” Bankman-Fried said. “I have a duty to talk to people, I have a duty to explain what happened, and I think I have a duty to do everything I can to try and do what’s right, if there is anything I can do to try and help customers out here.” Incidentally, at the very start of the interview he claimed that, as former FTX CEO, he “had a duty to all of our stakeholders, to our customers, our creditors.” Should someone ask any of them about SBF’s sense of duty?
Will the prodigal son return? SBF clarified that while he was speaking to DealBook from the Bahamas, he was not at the same penthouse that’s become so infamous in media coverage, and that actually, he probably could return to the U.S. “I’ve thought about” coming back, he told Sorkin, mentioning the prospect of testifying at a potential congressional hearing over the FTX mess.
What about possible criminal liability? “Personally, I don’t think so.” OK, so what are you going to do next? “I’ve had a bad month. … I don’t have time to think about my own future.”
For what it’s worth, as revealed Tuesday in the audio of his conversation with Tiffany Wong, SBF opened up FTX funds for user withdrawal only in the Bahamas hours before filing for bankruptcy. The reason being? “You do not want to be in a country with a lot of angry people in it.” Do tell!
Update, Dec. 1, 2022: This piece has been updated to clarify a quotation from Sam Bankman-Fried.