CEO Thought To Be Modern ‘Crypto Madoff’ Gets Claps, Sympathy After $Billions Go Missing

Former FTX CEO Sam “Crypto Madoff” Bankman-Fried was applauded Wednesday while being introduced during his most high-profile public appearance since his $32 billion crypto exchange declared bankruptcy on Nov. 7, burning customers.

FTX allegedly misused customer funds with $8 billion still owed to those who are out-of-pocket.

Bankman-Fried said he was going against lawyers’ advice by making a public appearance Nov. 30 via livestream from an undisclosed Bahamas location during an interview with Andrew Ross Sorkin at the New York Times DealBook Summit.

“On behalf of everybody here and on behalf of the public, I want to thank you for engaging at a time when I know you’ve been advised not to,” Ross Sorkin said. “Thank you so very very much. Thank you. Sam Bankman-Fried, everybody.”

Bankman-Fried faces possible criminal liabilities. He has continued to comment, tweet, and speak publicly about mistakes that he said may have contributed to FTX’s bankruptcy.

Bankman-Fried said he “unknowingly commingled funds,” blaming the breach on poor oversight and ignorance of all the goings-on at his firms when customer funds at FTX were loaned to sister company Alameda Research.

“… I was frankly surprised by how big Alameda’s position was which points to another failure of oversight on my part and failure to appoint someone to be chiefly in charge of that,” Bankman-Fried said. “But I wasn’t trying to comingle funds.”

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Claiming to be down to his last $100,000 and one credit card, Bankman-Fried said there isn’t much he can do to help customers hurt by the FTX collapse. He might be willing to appear before Congress.

Criminal liability is not his focus right now, Bankman-Fried said. “I don’t think that I personally have, you know [criminal liability] … but I think the real answer is that’s not what I’m focusing on.”

He said he had a duty to talk to people. ” I have a duty to explain what happened and I think I have a duty to do everything I can to try and do what’s right.”

Regarding funds that went missing from the FTX exchange shortly after the company filed for Chapter 11 bankruptcy, Bankman-Fried said he had been cut off from FTX’s systems by then.

Instead, he said that the FTX.US team and Bahamian regulators had both seized some of the money, along with some “actual improper access.” He did not provide details.

Bankman-Fried has denied reports that improper drug use was common at FTX. FTX’s in-house coach and psychiatrist, Dr. George K Lerner, told the New York Times that some FTX employees took prescription medicine for attention deficit disorder, but that the “rate of ADHD in the company was in line with most tech companies.”

Ross Sorkin asked Bankman-Freid whether FTX was run by “a bunch of kids who are on Adderall having a sleepover party.” The former CEO replied, “look, I screwed up. I was the CEO of FTX… That means that I was responsible ultimately for asking great things and I didn’t. We messed up big.”

Bankman-Fried has been compared to Bernie Madoff, the financier who ran the largest-ever Ponzi scheme — a type of investment fraud in which investors are lured by promises of artificially high rates of return with little or no risk, and earlier investors are paid with funds from more recent investors. A one-time chairman of the NASDAQ stock exchange, Madoff defrauded thousands of investors out $64.8 billion via his firm, Bernard L. Madoff Investment Securities LLC. In 2009 Madoff was sentenced to 150 years in prison and forced to forfeit $170 billion as restitution.

Images: Twitter, https://twitter.com/balajis/status/1598251134522920960?s=20&t=IpfmgjRePC_vabcwdWs5CA