No one seems to believe Sam Bankman-Fried when he says he was not aware of FTX’s wrongdoings.
When asked how his exchange, which assured clients their assets would be held apart from its own funds, ended up lending billions of dollars to hedge fund Alameda Research, the founder of the collapsing cryptocurrency exchange resorted to arguments that essentially amount to admissions of ignorance or a lack of understanding in an interview with New York Times columnist Andrew Ross Sorkin on Wednesday.
Prior to being included into FTX’s Chapter 11 bankruptcy case along with 130 other companies, Alameda was likewise substantially owned and controlled by Bankman-Fried. Over the summer, it had taken out a sizable loan from FTX to pay for losses brought on by the failure of the Terra/Luna stablecoin network. Just days before FTX collapsed, it withdrew $204 million from the exchange, according to data from Arkham Intelligence. The majority of the customer deposits, which were not covered by any insurance plan, are likely to be lost due to the estimated $8 billion gap between their combined assets and liabilities.
“I never tried to defraud anyone,” Bankman-Fried said, later adding that “I didn’t knowingly mix funds” and “I don’t know of any times I lied. “
He claimed that Alameda should be “I wasn’t in charge of Alameda, and I had no idea exactly what was happening. I was unaware of how big their position was.”
However, the majority of those who watched the FTX implosion were not duped.
“Legal ignorance is not a valid excuse. Incompetence is not either “Frances Coppola, a seasoned financial pundit located in the UK, tweeted.
Even harsher criticism came from Frontline Analysts’ Dan Davies.
He insisted that it was fraudulent to claim that people’s money was segregated when it wasn’t and to present one company’s bank account as another. “Fraud is not a crime that is “subjunctive.” Even if you receive your money back and even if client funds are ultimately safeguarded, fraud still took place.”
He claimed that Alameda should be “I wasn’t in charge of Alameda, and I had no idea exactly what was happening. I was unaware of how big their position was.”
However, the majority of those who watched the FTX implosion were not duped.
“Legal ignorance is not a valid excuse. Incompetence is not either “Frances Coppola, a seasoned financial pundit located in the UK, tweeted.
Even harsher criticism came from Frontline Analysts’ Dan Davies.
He insisted that it was fraudulent to claim that people’s money was separated when it wasn’t and to depict one company’s bank account as another. “Fraud is not a crime that is “subjunctive.” Even if you receive your money back and even if client assets are finally safeguarded, fraud nevertheless took place.”
Ackman has recently invested in startups including DIMO, Goldfinch Finance, and ORIGYNTech. He is a late adopter of cryptocurrencies. Following the failure of FTX, he claimed in a blog post that “crypto is here to stay, and with proper oversight and regulation, has the potential to greatly benefit society and grow the global economy.”
