ankman-Fried told Times reporter Andrew Ross Sorkin from an unknown location in the Bahamas that he did not knowingly commingle funds and was shocked by how much his investment firm, Alameda, had loaned to invest in roles that anticipated cryptocurrencies to rise.
When asked if he would face criminal charges for mishandling customer funds, he did not respond. "I don't personally believe I have..." he said, trailing off. "The real answer is that I'm not focusing on it.
It was a much larger percentage
SBF admitted that he had a limited view of Alameda's data because no single person was in charge of the company's finances.
This is Bankman-first Fried's public appearance since FTX went bankrupt. But it's not the first time we've heard from him since the collapse. He struggled to distinguish between Alameda, the hedge fund, and FTX, the cryptocurrency exchange.
"When I looked at how intertwined FTX was with Alameda, I looked at what fraction of trading volume, what fraction of liquidity on the platform Alameda represents," Bankman-Fried explained. "That had decreased from around 45% in 2019 to around 2% this year. However, it was a much larger proportion in terms of positions and balances."
Bankman-Fried stated that he became aware of a problem on November 6, when customers began withdrawing funds from the exchange.
"Alameda's position on FTX was massive," he said. "And we were seeing a run on the bank, which resulted in $4 billion in withdrawals per day, at which point we began calling prospective sources of financing."
'I didn't think it was crucial for FTX.'
The saga began earlier this month with a scoop from a crypto news site revealing that a large portion of Alameda Research's balance sheet was made up of tokens printed by the platform that would earn consumers trading discounts on its exchange.
After a run on the exchange pressured it into bankruptcy, its bankruptcy filing revealed a slew of financial mismanagement. This encompassed everything from employees purchasing homes with company funds to Alameda lending Bankman-Fried a whopping $1 billion.
"I didn't think it was a game changer for FTX," Bankman-Fried said of the CoinDesk scoop. "I was thinking more about this because Alameda is going to be really tight on funds, and it might have a minor impact on FTX."
"From the extreme downside perspective, I was not nearly cautious enough," Bankman-Fried said of his collateral management system standards at Alameda. "I considered a 30% drop over a 30-day period as an extreme down-move event that we had seen before. What happened here was a 95% drop from a year ago and a 60% drop in a few days."
'It was intended to be owned by the company.'
Since its demise, other stranger details have emerged. While Bankman-roommates Fried's in the Bahamas dated each other while running the empire, he told YouTuber Tiffany Fong that he channeled just as much money to Republicans through dark money pools.
Sorkin questioned Bankman-Fried about a 2019 tweet in which the former CEO discussed taking stimulants to wake up and sleeping tablets to sleep. According to Bankman-Fried, the drugs he used were prescribed to him.
Bankman-Fried explained that the company purchased a property for employees to entice Silicon Valley employees to visit the Bahamas. "I'm worried about how those investments might turn out for them," he admitted.
He was also unsure whether or not FTX had purchased a vacation home for his parents.
In an interview with Dealbook, SBF stated that his political donations were directed toward candidates who would make progress toward preventing future pandemics rather than attempting to persuade politicians to meet with regulators or enact direct-clearing regulations through the Commodity Futures Trading Commission (CFTC).
He also stated that the emphasis on obtaining licenses for the exchange all over the world was a diversion from not investing in risk management and conflict-of-interest compliance.
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