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Sam Bankman-Fried says FTX bankruptcy filing was a mistake in interview


FTX founder Sam Bankman-Fried said the collapsed crypto company shouldn’t have filed for bankruptcy protection and criticized regulators in an interview published Wednesday by news website Vox

Bankman-Fried, known as SBF, later walked back the comments and said the direct messages he exchanged with the reporter on Twitter were not meant to be public. 

“It sucks,” Bankman-Fried said in a Twitter thread. “I’m really sorry that things ended up as they did.”

Cryptocurrency exchange FTX declared bankruptcy and Bankman-Fried resigned as chief executive last week after reports that Almeda Research, a trading firm founded by Bankman-Fried, relied heavily on a token issued by FTX.

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How did FTX collapse?

The public and rapid unraveling of FTX started earlier this month when news site CoinDesk reported Almeda Research had a balance sheet full of FTT, the cryptocurrency issued by FTX.

The revelation spooked clients and inventors. Rival exchange Binance said it would sell its holdings of FTX tokens and pulled out of an agreement to take over the company. 

FTX filed for bankruptcy on Nov. 11.

‘F— regulators’

In the interview, Bankman-Fried said regulators “make everything worse” and “don’t protect customers at all.”

“F— regulators,” Bankman-Fried said.

He also said his previous calls for regulations for cryptocurrencies were just for public relations.

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FTX bankruptcy was a ‘mistake’

Bankman-Fried said his single biggest mistake had been filing for bankruptcy protection.

 “If I hadn’t done that, withdrawals would be opening up in a month with customers fully whole,” he said, according to screenshots of the Twitter direct messages. 

Bankman-Fried said he should’ve tried to raise more money instead of declaring the company bankrupt. The Wall Street Journal reported Bankman-Fried had unsuccessfully searched for commitments from investors after filing for bankruptcy.

Bankman-Fried said the people in charge of FTX’s bankruptcy process “are trying to burn it all to the ground out of shame.”

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Bankman-Fried later took back some of his comments in a Twitter thread, saying regulators have “an impossible job” and some have “deeply impressed” him “with their knowledge and thoughtfulness.”

“Some of what I said was thoughtless or overly strong–I was venting and not intending that to be public,” Bankman-Fried tweeted. “I guess at this point what I write leaks anyway.”

A Vox spokesperson told Reuters that all communication with its reporters is on-the-record unless the subject and the reporter agreed otherwise.

New CEO calls FTX situation ‘unprecedented’

After his resignation, Bankman-Fried on Nov. 11 was replaced as CEO by John J. Ray III, who oversaw Enron’s bankruptcy. 

Ray attempted to distance the company from Bankman-Fried in a filing in federal bankruptcy court Thursday. 

“The Debtors have made clear to employees and the public that Mr. Bankman-Fried is not employed by the Debtors and does not speak for them,” Ray said. “Mr. Bankman-Fried, currently in the Bahamas, continues to make erratic and misleading public statements.” 

He specifically cited Bankman-Fried’s “f— regulators” comment in the court document and didn’t mince words when describing the situation at FTX.

“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,” Ray 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.”

Read More: Sam Bankman-Fried says FTX bankruptcy filing was a mistake in interview

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