A Former Crypto Tycoon Whose Fortune Just Crashed From $26 Billion to $100,000 Breaks His Silence
One of cryptocurrency’s former billionaires has spoken out after seeing his fortune drop from $26 billion to $100,000.
Although Sam Bankman-Fried, CEO of the defunct cryptocurrency exchange FTX, was previously considered one of the world’s wealthiest individuals, he now claims to have just $100,000 (£82,440) in his possession.
When clients at FTX began to worry about the company’s financial stability and attempted to withdraw their funds at once, the cryptocurrency equivalent of a bank run occurred, and FTX was unable to withstand the onslaught of customers trying to get their money out.
Since its fall, the new FTX management has blamed the collapse on a “complete failure of corporate controls” on the part of the cryptocurrency exchange’s administration.
Bankman-Fried has given many interviews since FTX’s demise in the middle of November, but yesterday was the first video interview he’s given since FTX filed for bankruptcy on November 11.
The 30-year-old man stated he was to blame for the failure of FTX because he had miscalculated the level of risk his two companies, FTX and Alameda Research, were incurring.
Through a video hookup from the Bahamas, he told attendees at the New York Times’ DealBook event that he had “close to nothing” and that his enterprises “completely failed” in terms of risk management, which he called “pretty embarrassing in retrospect.”
“Whatever happened, why it happened, I had a duty to our stakeholders, our customers, our investors, the regulators of the world, to do right by them,” he said.
It has been claimed that Bankman-Fried allowed Alameda to gamble with FTX client funds.
Customers’ funds should indeed have been kept separate on reputed exchanges like FTX. MF Global is just one example of a financial institution that found itself in legal trouble for mishandling consumer funds during the last decade or so.
Bankman-Fried said he didn’t willfully mix client monies with Alameda’s and was certain that the millions of upset consumers would get their money back.
He has said that he believed the FTX subsidiary in the United States was financially sound and ready to begin processing withdrawals immediately. When asked about the future of client money in the remainder of FTX, which is far bigger than the US business, he replied it was mainly out of his hands at this time.
In a petition with the US bankruptcy court for the district of Delaware, FTX’s new CEO, John Ray III, blasted the company’s previous leadership. “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 said.
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”