Sam Bankman-Fried Says His Net Worth 'is Close to Zero' After FTX Collapse
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Sam Bankman-Fried Says His Net Worth 'is Close to Zero' After FTX Collapse

Created 3mo ago, last updated 3mo ago

In an interview, the former CEO of the formerly No. 2 crypto exchange in the world, FTX, said he didn't commit fraud and believes he could still fix his bankrupt businesses.

Sam Bankman-Fried Says His Net Worth 'is Close to Zero' After FTX Collapse

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Sam Bankman-Fried doesn't want to think about going to jail.

Asked about that possibility during an interview at the New York Times Dealbook Summit conference on Nov. 30, the CEO of the bankrupt FTX cryptocurrency exchange was clearly uncomfortable. What he said, in the end, is:

"There's a time and a place for me to think about myself and my own future. I don't think this is it."

A whole lot of other people are.

FTX was the world's second-largest crypto exchange at the beginning of November, worth an estimated $32 billion. Now, as many as one million customers around the world look like they have lost their life savings, with a hole of as much as $8 billion in its books.

That hole was allegedly caused by Alameda borrowing $10 billion on lousy collateral.

And as interviewer Andrew Ross Sorkin said, the "generous view is that you are a young man who made a series of terrible, terrible, very bad decisions."

Which is essentially the story he's pitching: Sam Bankman-Fried as a whizz kid so far in over his head that he didn't even realize that the company should have had an executive looking at the risk management and leverage between the FTX and FTX US exchanges and trading firm Alameda Research — whose horribly overleveraged bad bets brought the company down.

The other one, Sorkin said, "is that you have committed a massive fraud, that this is a Ponzi scheme, a manipulation of the system."

To which Bankman-Fried replied: "I didn't ever try to commit fraud on anyone."

He later said, "I don't have any hidden funds" and that he wasn't lying.

Bankman-Fried also claimed to be the kind of broke that rich people think is broke, saying that his net worth is "close to zero" and following that up by saying he has a bank account with "$100,000 or something like that."

Reality Distortion

Asked what is your future, Bankman-Fried repeated the phrase "I don't know" five times in the course of a rambling answer that was a lot less about him than his belief — or so he claims — that he can still somehow find new investors, raise billions of dollars, and make everything better.

What came out was something that looked and sounded like a person who'd been called a wunderkind revolutionary businessman trying to engage Steve Jobs' famed reality distortion field, and failing miserably.

It was a fascinating mix of magical realism and a somewhat ludicrous attempt to offload blame for the "scraps" that FTX customers are very likely going to end up with on the team of restructuring experts currently running the 130-odd company FTX Group — whose lawyer just accused Bankman-Fried of running the companies as his "personal fiefdom." He said:
"I would have thought that there would be, you know, a chance for a pathway forward here that would bring more value to customers then what would happen if you just sort of sold everything else for scraps, and I don't have confidence…  I can't promise anyone anything, and it's not really in my hands to a large extent."

Translation: I could fix everything.

He added:

"I would think that it would make sense to be exploring that because I think there's a chance that customers could end up being a lot more whole — I don't know, maybe even fully whole — if there was a really strong concerted effort."

Translation: When nothing gets fixed it's their fault, not mine.

Which is pretty impressive given how many times he said things along the lines of "I screwed that up" and "I am to blame" in the course of explaining how he managed to miss that his own trading firm, Alameda, was allegedly sucking billions of dollars out of FTX.

That despite terms of service that clearly read, as Sorkin pointed out: "None of the digital assets in your account are the property of or shall or may be loaned to FTX trading. FX trading does not represent or treat digital assets and users' accounts as belonging to FTX trading."

Which led Sorkin to ask: "So how is it possible that Alameda had this loan of such a large size?"

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