Key Takeaways
- Bankman-Freid gave a long interview live at the New York Times Dealbook summit last night
- Against apparent legal advice, he answered a wide range of questions on the entire debacle
- Very hard to believe him when he says he was not as in the know as would be expected of someone who was CEO of FTRX and owned 80% of Alameda
There are not many live television events that have truly blown my mind.
The one that immediately springs to mind is watching Zinedine Zidane, one of the world’s greatest footballers on the biggest stage of all – the World Cup final – literally headbutting an opposition defender on my television screen sixteen years ago.
More recently, I recall watching my country’s (Ireland) prime minister, Leo Varadkar, speaking live on our national broadcaster about the COVID pandemic, when he announced the first (and at the time, what we believed would also be the last) lockdown.
It will probably be a while before I forget those historic moments. And I’m pretty sure I’ll remember what I watched last for a while, too.
Why did Bankman-Fried give the interview?
Sam Bankman-Fried, disgraced CEO of collapsed exchange FTX – who I am entirely sick of talking about – last night gave an interview for around an hour at the New York Times Dealbook summit.
Why this interview was taking place at all, I will never know. Bankman-Fried dialled in from the Bahamas, apparently against the advice of “people” – who one can assume might work in the law profession.
“I think I have a duty to talk and to explain what happened,” he said. “I don’t see what good is accomplished by sitting in a room pretending that the outside world doesn’t exist.”
“It’s not what I’m focusing on”, was his response when asked whether he was concerned about potential criminal liability.
Like his disastrous leaked DM conversation over Twitter, I simply don’t know why this interview took place. It is hard to believe anything coming out of Bankman-Fried’s mouth at this point. And regarding that Twitter conversation, Bankman-Fried explained it by saying the reporter was a “longtime friend” who he “stupidly forgot” was a reporter. Huh?
Last night’s interviewer, Andrew Sorkin, quizzed him about some of the wild confessions in that DM exchange, which to me betrayed Bankman-Fried’s true character. Bankman-Fried softened on his stance somewhat, but did agree that he played a “game”, like “we all did”, with regards to his image.
https://twitter.com/DanniiAshmore/status/1592988019187154944
There was a lot of “to the best of my understanding”, “as far as I know” and “details are not clear, but”. Despite being CEO of FTX and owning 80% of Alameda, Bankman-Fried repeatedly stated that he did not have full oversight over certain issues.
Call me a cynic, but I refuse to believe a company can make billion-dollar loans (such as the one to Genesis, who now are also insolvent) without its 80% owner knowing.
He also stated, again bizarrely, that FTX US could even begin allowing withdrawals promptly, and they were fully solvent to his “knowledge”. Are we meant to believe he has really been this much out of loop?
What next for Bankman-Fried?
The big question is whether Bankman-Fried faces prison time for his actions. Right now, most people believe he won’t. Given he was chatting at a New York Times summit, albeit virtually, I don’t know what to think.
He was perceptively nervous throughout the interview. Nervous smiles, twitching, eyes down at the floor. Questions about him taking prescription drugs in the office had him a bit frazzled, while his “I’ve had a bad month” comment drew a laugh from the audience.
The biggest issue, of course, is that we still don’t know how he allowed so many assets to be transferred across to Alameda. He constantly tried to dance around some of the more pointed issues around the transfer of funds, and nobody has anymore clarity into what happened there – which is likely the key point in deciding whether he will face real punishment.
To most, it seems like fraud, sending client assets away to Alameda while smiling on magazine covers and talking before Congress. And it is very hard to believe that Bankman-Fried did not see how large these transfers were, nor how crippling the losses were at Alameda.
“I was failing to pay nearly enough attention to positions and positional risk on the exchange and to Alameda’s in particular” he stumbled out. ”I substantially underestimated what the scale and speed of the market crash would look like,” he added.
At this point, I have had enough of Bankman-Fried. What a total embarrassment for the entire industry. The industry has been dealt a body blow, which is far from over. Let’s hope it can one day move past this.