Crypto

Controversial Bankman Fried Hints at Washington’s Crypto Meltdown Testimony

In a conversation that lasted several hours, the 30-year-old former billionaire claimed that all he had now was his last $100,000 and a working credit card. He said he no longer has access to company accounts or records and he’s still not sure what the key facts are about what caused the sudden implosion of his investment empire, which includes numerous exchanges, holding companies and a large crypto hedge fund belonged.

Despite pleas from his attorneys to remain calm and possible criminal penalties, Bankman-Fried has continued to tweet, comment and speak publicly about the missteps that may have contributed to FTX’s bankruptcy.

“The classic advice, right, is don’t say anything, back off into a hole,” Bankman-Fried said. “I have a duty to try to do the right thing to help the customers out here.”

Bankman-Fried signaled that he would be willing to testify if called by Congress. The House Financial Services Committee will hold a hearing on FTX on December 13 and will chair it Maxine water (D-Calif.) has said she would like to hear from Bankman-Fried.

“I wouldn’t be surprised if I spoke up there about what happened to our representatives,” he said.

FTX’s new CEO and restructuring officer, John Ray III, has painted a damning picture of Bankman-Fried’s management of the company in the bankruptcy filings.

The company did not have a centralized process for managing its cash. Top executives, including Bankman-Fried, routinely borrowed for investments ranging from real estate in the Bahamas to digital startups. Software installed to cover up misuse of customer funds. Billions of dollars in corporate assets are still unaccounted for.

Bankman-Fried’s billion-dollar investment empire fell apart earlier this month after reports emerged that Alameda Research, an affiliated hedge fund he also owned, had drained its balance sheet with an underused token issued by FTX. A mass sale of the token wiped out Alameda’s finances, and clients withdrew their funds from FTX en masse.

In Wednesday’s interview, Bankman-Fried claimed that Alameda had built a massive investment position in FTX and that when the hedge fund’s balance sheet exploded, it created a huge hole that the stock market couldn’t fill.

Days later, FTX froze withdrawals, losing billions of dollars in client assets. Bankman-Fried announced his resignation when the Bahamas-based exchange filed for bankruptcy on November 11.

Bankman-Fried on Wednesday declined to address directly whether he used client funds — as has been claimed — to plug holes in Alameda’s balance sheet when crypto prices plummeted last year. He acknowledged that many FTX clients initially opened their accounts with the exchange by transferring funds to Alameda.

“I did not knowingly mix funds,” he said. “I wasn’t trying to mix funds.”

Leave a Reply

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

Back to top button