Sam Bankman-Fried Blames ‘Huge Management Failures’ for FTX Collapse

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Sam Bankman-Fried Blames ‘Huge Management Failures’ for FTX Collapse

On Wednesday, Treasury Secretary Janet L. Yellen called FTX’s collapse a “Lehman moment” for the cryptocurrency industry, referring to the bankruptcy of the Wall Street bank Lehman Brothers at the start of the 2008 financial crisis. She indicated that she viewed cryptocurrencies with skepticism, calling them “very risky assets” and adding that she was thankful that their recent volatility had not spilled over into the mainstream banking sector.

For someone facing possible criminal charges, Mr. Bankman-Fried has been surprisingly willing to speak publicly. As the crisis unfolded in early November, he posted a series of apologetic tweets — statements his lawyers later chastised him for making, he has said. Two days after FTX’s bankruptcy filing this month, he spoke with The Times for more than an hour about how he had managed his business empire while dodging questions about his company’s use of customer money.

On the video stream at the DealBook conference, Mr. Bankman-Fried, wearing a black T-shirt, fidgeted at times, as he often does during interviews. He said he was speaking publicly against the advice of his lawyers, who have instructed him to keep quiet and “recede into a hole.” He said he had decided to disregard their advice.

“That’s not who I am,” he said. “I have a duty to talk.”

The relationship between FTX and Alameda had long been a source of criticism. Alameda traded heavily on the FTX platform, meaning it sometimes benefited when FTX’s other customers lost money, raising a conflict of interest. Mr. Bankman-Fried lived with Ms. Ellison in a penthouse in the Bahamas, and at times the two were romantically involved.

Mr. Bankman-Fried claimed he was “nervous about a conflict of interest” with Alameda, and distanced himself from its operations partly for that reason.

In addressing the impact of the company’s collapse on his own future, he was understated. “I’ve had a bad month,” he said at one point, to laughter from the audience.

Mr. Bankman-Fried also said the crisis had reduced his net worth to about $100,000. “I don’t have any hidden funds,” he said. “I put everything I had into FTX.”