Let me correct the quote reference just a skosh: “I expect I’m gonna have nothing at the end of this,” said the man hunkering down in the Bahamas with $100,000 in the bank and $121 million in recently purchased real estate there as well.
Not in any sense does Bankman-Fried suggest that he feels any sympathy for the victims of the FTX collapse, nor any real responsibility for it. He repeatedly dodges the latter, especially in his breathtaking claim that he didn’t bother to manage risk for FTX, and only admits to being “vaguely aware” of customers’ deposited assets getting transferred to Alameda, which crosses “a bright red line,” as Stephanopoulos points out. SBF’s response was that he was asleep at the switch:
“There is something maybe even deeply wrong there, which was I wasn’t even trying. Like, I wasn’t spending any time or effort trying to manage risk on FTX and that that was obviously a mistake,” he said. “If I had been spending an hour a day thinking about risk management on FTX, I don’t think that would have happened. And I don’t feel good about that.”
“That’s a pretty stunning admission,” Stephanopoulos interjected partway through that quote. It’s a stunning rationalization, not an admission, however. Later, Stephanopoulos told the panel that managing risk is Job One for someone at the top of a funds exchange of any sort, which begs the question of what SBF was really doing with FTX, Alameda, and customer assets. Bankman-Fried’s attempt to claim that he never bothered with risk management beggars belief.
Both of Mr. Bankman-Fried’s parents are Stanford Law School professors, who Mr. Bankman-Fried has said were influential in shaping his ethical framework. Their vocations also helped lend Mr. Bankman-Fried, 30, a further veneer of credibility with investors and others as he built his cryptocurrency empire.
Mr. Bankman-Fried was asked by Andrew Ross Sorkin at the DealBook Summit what he told his parents when his firm began to collapse this month. FTX was forced to file for bankruptcy after an avalanche of customer withdrawals created an $8 billion hole on the firm’s balance sheet. Mr. Bankman-Fried likened the customer exodus to a run on the bank.
“I think I called them up and said, ‘Hey guys, I think there might be a problem, like, it looks like Alameda’s position might be imploding here — there might be a liquidity issue,’” he said.
When asked about the $300 million worth of real estate that FTX and Mr. Bankman-Fried’s parents reportedly bought in the Bahamas, he said he did not “know the details but that it was not intended to be their long-term property.”
“They may have stayed there while working with the company sometime over the last year,” he said of his parents.
His parents were compliance lawyers who worked for FTX? Could disbarment be in their future?