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Bankman-Fried stirs up controversy again: 'I didn’t knowingly commingle funds'

Published Dec 01, 2022 03:45AM ET Updated Dec 01, 2022 04:24AM ET
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By Laura Sánchez 

Investing.com - Sam Bankman-Fried, founder and now former CEO of FTX, once the world's second largest cryptocurrency exchange (after Binance), is back in the spotlight.

In an interview with New York Times, Bankman-Fried has tried to distance himself from accusations of fraud and abandoning FTX users with billions of dollars in losses.

Bankman-Fried has denied using funds from the platform for his other firm - Alameda Research.

"I did not ever try to commit fraud," Bankman-Fried said in the NYT interview.

The liquidity crisis at FTX came after Bankman-Fried secretly moved $10B of FTX client funds to Alameda Research, according to Reuters.

Bankman-Fried told Reuters in November that the company did not "secretly transfer," but rather made a mistake in its "confusing internal labeling."

"I didn't knowingly commingle funds. I was frankly surprised at how big Alameda's position was, which points to another oversight failure on my part and not having appointed someone to be chiefly in charge of it," Bankman-Fried said in the interview.

The FTX crash continues to dent the cryptocurrency sector, whose image was already damaged after other crypto platform bankruptcies last May.

Bitcoin, the world's largest cryptocurrency, has plummeted in one year from a high of $69,000 to the current $17,000. Ethereum, the world's second-largest cryptocurrency, the world's second largest cryptocurrency, has also suffered heavy losses.

In fact, it is believed that much of the liquidity crisis was due to Alameda using customer funds to cover some loans that were being drawn down due to the credit crunch caused by the collapse of LUNA, noted Cointelegraph.

Earlier this year, the offshore exchange and Bankman-Fried's U.S. subsidiary had a combined valuation of $40B, according to Crunchbase data echoed by Yahoo Finance.

By the end of the first quarter, Bankman-Fried's personal wealth had grown to more than $25B, according to the Bloomberg Billionaires Index.

Less than 7 months later, Bankman-Fried declared FTX bankrupt and resigned as CEO. FTX and affiliated companies owe an estimated $8B to more than a million customers.

Bankman-Fried stirs up controversy again: 'I didn’t knowingly commingle funds'
 

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Comments (1)
John Kosanke
John Kosanke Dec 02, 2022 8:35AM ET
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That doesn't reduce your debt, Sam.
 
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