Former FTX CEO and alleged fraudster Sam Bankman-Fried revealed during a conversation with a cryptocurrency vlogger that he does not know how to code.
FTX recently filed for bankruptcy after users discovered that trading firm Alameda Research, a company run by former Bankman-Fried love interest Caroline Ellison, had allegedly been using funds from FTX to make investments. Tiffany Fong, who has 13,000 subscribers on YouTube, pressed the 30-year-old entrepreneur during the interview on why his venture imploded in spectacular fashion.
When asked about a reported backdoor that allowed him to alter the company’s financial statements and move funds to Alameda Research without alerting other executives, Bankman-Fried denied that he created any such mechanism. “That I can tell you is definitely not true. I don’t even know how to code,” the Massachusetts Institute of Technology graduate responded. “I literally never even opened the code for any of FTX.”
The admission from Bankman-Fried contrasts with descriptions of his status as a cryptocurrency wunderkind. Michael Grimes, an investment banker with Morgan Stanley charged with helping Elon Musk acquire Twitter, had told the world’s richest man that Bankman-Fried built the platform “from scratch” and described him as an “Ultra Genius.”
The founder also regrets filing for bankruptcy since FTX US, the American subsidiary of the cryptocurrency exchange, remained solvent even as FTX, which is based in the Bahamas, experienced a liquidity crisis. “I was sort of coerced into doing it, but I should have just said no. I had that right,” he commented, claiming that customers in the American branch should expect full recoveries of their assets. “I would give anything to un-file that right now.”
Bankman-Fried contributed nearly $39 million during the recent midterm elections to Democratic candidates, according to data from Open Secrets, which listed him as the nation’s sixth-largest individual midterm donor. He claimed to Fong that he also contributed “about the same amount” in dark money to Republicans. “The reason was not for regulatory reasons. It was because reporters freak the f*** out if you donate to Republicans,” he said.
Bankman-Fried, whose fortune disappeared overnight when his company folded, initially sought $8 billion from investors to cover withdrawal requests made by customers. During a second interview with Fong, the entrepreneur admitted that he should have been “way more cautious and careful” with the boundaries between FTX and Alameda Research. “It was a combination of the crash in the spring that took 50% out of asset values, combined with a hypercorrelated crash scenario this month,” he said when explaining why his team was unable to manage a “complete run on the bank” at FTX.
Many journalists were surprised that Bankman-Fried has been freely providing comments to media outlets given the bankruptcy proceedings for his company, which the attorney who once oversaw the fallout from Enron described as the worst case of corporate failure he has ever witnessed. In one message to a Vox reporter, Bankman-Fried admitted that his persona as an “effective altruist” was largely a ruse meant to earn the trust of “woke westerners.”
The founder, however, expressed remorse over the failure of his company. “Right now, I’m mostly focused on what I can do and where I can be helpful,” he told Fong. “There will be a time and a place for ruminating on my future, but right now it’s more one foot in front of the other and trying to be as helpful and constructive as I can.”