The FTX platform boss, who resigned on Friday amid his company’s bankruptcy, gave an interview to the New York Times. The newspaper also reveals new, unpublished information.
For those wondering if Samuel Bankman-Fried (SBF) was the author of the latest strange tweets, based on “What” and letters of the alphabet, the answer is yes. The founder of FTX, who went from hero to anti-crypto hero in a matter of days, gave an interview to New York Times.
As a reminder, the company he founded in 2019 went bankrupt on Friday. Today FTX is being targeted by the Securities and Exchange Commission (the SEC, the American financial guard) and the Department of Justice, to find out if there were any conflicts of interest between FTX and its trading company Alameda Research.
Two days after his company went bankrupt, SBF gave an interview in which he seemed surprisingly calm.
“You may have thought I wasn’t sleeping right now, and on the contrary, I’m getting some sleep,” he said SBF. “It could be worse,” adds the latter.
The relationship between FTX and Alameda Research, the origin of the fall of SBF
“The relationship between Alameda and FTX is the cause of Mr. Bankman-Fried’s downfall,” the New York Times. With his trading skills, SBF founded the trading company Alameda Research in 2017. The company, which gambled on buying bitcoins in the United States to sell them at a higher price in Japan, quickly made $20 million. Then in 2019, with its expertise in cryptocurrencies, SBF decided to launch the FTX cryptocurrency trading platform.
However, while the two entities were to remain distinct, the New York Times reveals close ties between the two facilities, including a previous romantic relationship between SBF and Alameda Research head Caroline Ellison.
“Alameda has traded extensively on the FTX platform, meaning it has at times profited from the losses of other FTX clients, a dynamic that critics have called a conflict of interest. In the past, Mr. Bankman-Fried has defended the deal, stating that Alameda has provided crucial liquidity – capital injections that have enabled other clients to trade on the exchange (including the FTX trading platform, ed.),” it read.
Everything seems to have changed a few months ago when paradoxically SBF established itself as a “savior” of the crypto ecosystem. In fact, following theterra luna blockchain collapse, the latter had come to the aid of some companies in danger, from Digital Voyager to BlockFi. It was during this period that the latter had dared to declare that some companies were “secretly insolvent”.
Loans up to $10 billion
Alameda Research reportedly used FTX client funds to make payments last spring. The trading platform has lent up to $10 billion to Alameda. “Alameda had built a large ‘margin position’ on FTX, which basically means that he had borrowed funds from the cryptocurrency exchange,” Sam Bankman-Fried pointed out.
“It was much more important than I thought,” said the latter, referring to several billion dollars loaned without giving a precise amount.
While the Fed has called for rapid regulation of cryptocurrencies following the FTX bankruptcy, SBF explains that it has “worked constructively with regulators, officials to handle the (company) liquidation, and the company to try to do what it’s better for consumers.”
Defended by Paul Weiss’ attorneys while FTX is represented by the law firm Sullivan & Cromwell, SBF rejects the prospect of a prison sentence.
“People can say all the mean things they want about me online,” she said.
“In the end, what matters to me is what I’ve done and what I can do.” Based in the Bahamas, the latter declined to give his current location due to security concerns.