The decade's most triggering comedy
FTX filed for bankruptcy last month after users discovered that the company was likely fraudulently intertwined with trading firm Alameda Research; both were controlled by Bankman-Fried and a close-knit group of amateur executives.
During a Saturday interview with the BBC, however, the would-be digital asset wunderkind said he would “give anything” to start a new venture and earn the funds necessary to compensate investors and customers. “I’m going to try if I can,” he added.
“I’m going to be thinking about how we can help the world and if users haven’t gotten much back, I’m going to be thinking about what I can do for them,” the embattled entrepreneur continued. “And I think at the very least I have a duty to FTX users to do right by them as best as I can.”
Members of the Senate Agriculture Committee held a hearing with Commodity Futures Trading Commission Chairman Rostin Behnam on increasing federal oversight of the cryptocurrency sector. Officials at the Securities and Exchange Commission launched a criminal investigation into Bankman-Fried to determine whether he broke the law by allegedly transferring FTX customer funds to Alameda Research, according to a report from The New York Times. A hearing for the House Financial Services Committee is scheduled for Tuesday.
Bankman-Fried has generally insisted during multiple media interviews that his companies’ failure was due to his ineptitude rather than overt criminal behavior. Citing one unnamed former FTX employee, the BBC asked Bankman-Fried whether he lied about his purported lack of knowledge about the flow of assets between his two companies.
“No that’s not true,” he responded, although he acknowledged that he was ultimately responsible for any mishandling of funds in his capacity as chief executive. “I didn’t knowingly commit fraud, I don’t think I committed fraud, I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”
Current FTX CEO John Ray III, a lawyer who succeeded Bankman-Fried to handle the company’s bankruptcy, confirmed in a court filing that the team managing the company was utterly unqualified. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” he wrote.
Bankman-Fried was initially hesitant to appear before lawmakers, as he claimed that he first needed to finish “learning and reviewing what happened” at the cryptocurrency exchange. House Financial Services Committee Chairwoman Maxine Waters (D-CA) had been criticized for the evident politeness in her invitation to Bankman-Fried; she told the possible fraudster that her colleagues “appreciate that you’ve been candid in your discussions about what happened.”
When asked by the BBC if he is preparing for possible arrest and imprisonment, Bankman-Fried indicated that he is indeed concerned about such an outcome.
“There’s some time at night ruminating, yes,” he said, “but when I get up during the day, I try and focus, be as productive as I can and ignore things that are out of my control.”