Ex-FTX CEO Bankman-Fried says he didn’t ‘knowingly’ misuse clients’ funds

NEW YORK — Sam Bankman-Fried, the former chief executive officer of the failed cryptocurrency exchange FTX, says he did not “knowingly” misuse customers’ funds and that he believes his millions of angry customers eventually will be made whole.

“I didn’t ever want to commit fraud on anyone. I was shocked at what happened this month,” Bankman-Fried said Wednesday during a video interview with Andrew Ross Sorkin at a conference put on by The New York Times.

FTX collapsed in mid-November, filing for bankruptcy protection on Nov. 11 amid the cryptocurrency version of a bank run, in which customers tried to withdraw their assets all at once because of growing doubts about the financial strength of the company and its affiliated trading arm, Alameda Research.

Since its collapse, FTX’s new management has called the cryptocurrency exchange’s management a “complete failure of corporate controls.”

Bankman-Fried said he takes responsibility for FTX’s collapse and that he failed to grasp the amount of risk FTX and Alameda were taking on.

One of the accusations Bankman-Fried has faced from critics is that he arranged for Alameda to use customers’ assets in FTX to place bets in the market.

Bankman-Fried said he did not “knowingly” co-mingle customers’ assets with Alameda.

Fxchanges like FTX are supposed to segregate customers’ deposits from any bets they place in the markets. Other financial companies have gotten into legal hot water for misusing customers deposits, a primed example being MF Global roughly 10 years ago.

“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,” Bankman Fried said.

Sorkin pushed Bankman-Fried on how and when investors will get their money back, to which Bankman-Fried said he largely believed the U.S. affiliate of FTX was entirely solvent and could start processing withdrawals at once.

As for the rest of FTX, which was significantly larger than the U.S. division, he said the fate of customers’ funds are largely out of his control.

Bankman-Fried, who, on paper, was once one of the richest people in the world, now says he likely has less than $100,000 to his name after FTX’s failure and that he is getting by on one credit card while still in the Bahamas.