Sam Bankman-Fried claims he ‘misaccounted’ $8B in FTX funds

Math doesn’t appear to be the MIT graduate’s energy.

Disgraced FTX founder Sam Bankman-Fried — an alum of the vaunted college — gave a weird rationalization for an $8 billion funds shortfall that helped pressure the doomed cryptocurrency platform into chapter 11 final month — claiming he had merely “misaccounted” the money.

Bankman-Fried scrambled to elucidate what occurred at FTX during an interview with Bloomberg from his luxurious penthouse in the Bahamas. During the interview, the broke crypto bro pulled out a spreadsheet detailing the unhealthy math he used whereas approaching buyers for a possible last-second bailout of FTX and its sister buying and selling agency Alameda Research.

In a piece labeled, “What I *thought*,” Bankman-Fried lists $8.9 billion in money owed in opposition to practically $28 billion in belongings — $9 billion of which have been purportedly “liquid.” In one other part with the precise numbers, FTX had $8 billion much less in liquid belongings than Bankman-Fried had claimed.

“It looks naively to me like, you know, there’s still some significant liabilities out there, but, like, we should be able to cover it,” Bankman-Fried informed Bloomberg.

Sam Bankman-Fried, founder and chief executive officer of FTX
Sam Bankman-Fried, founder and chief government officer of FTX.
Bloomberg through Getty Images

The Bloomberg reporter then identified the $8 billion distinction.

“You misplaced $8 billion?” the reporter requested.

“Misaccounted,” replied Bankman-Fried, who minored in math whereas graduated from MIT with a Bachelor’s diploma in physics.

The report highlighted the extent to which funds for FTX and Alameda have been intermingled simply earlier than the company fell into chapter 11. Last month, Reuters reported that Bankman-Fried had secretly transferred $10 billion in FTX shopper funds to prop up Alameda Research’s dangerous bets.

Bankman-Fried made his newest protection of FTX’s implosion from the luxurious penthouse the place he, his ex-lover Caroline Ellison and a small group of roommates ran FTX and Alameda Research. Ellison served as CEO of Alameda till its meltdown.

Bankman-Fried went on to say that clients sometimes wire their money to Alameda somewhat than FTX. He additionally asserted that FTX’s system had double-counted that money, which might clarify the disparity in the numbers.

Bahamas penthouse
Sam Bankman-Fried and his mates ran FTX from a luxurious penthouse.
Seaside Real Estate/ Bahamas MLS

The discredited government didn’t totally clarify what occurred to the $8 billion in belongings lacking from the rudimentary steadiness sheet.

“I was real lazy about this mental math,” Bankman-Fried stated at one level in the interview.

Bloomberg additionally pressed Bankman-Fried to reply to criticism that he was pinning the blame for FTX’s collapse on Ellison and different subordinates.

Caroline Ellison
Caroline Ellison was CEO of Alameda Research.
Twitter / @carolinecapital

“I think the biggest failure was that it wasn’t entirely clear whose fault it was,” he replied.

FTX’s weak accounting practices below Bankman-Fried and his allies have drawn sharp criticism from the company’s new management in chapter court docket submitting.

New CEO John Ray III, who led Enron by way of its chapter, stated FTX’s accounting practices and company governance requirements have been the worst he’s ever seen. He additionally referred to as out lavish spending by Bankman-Fried and others, together with $300 million on luxurious actual property and expense requests that have been authorized with emojis.

Back to top button