FTX: Bankman-Fried claims he ‘basically forgot’ about account holding $8bn customer cash
FTX founder Sam Bankman-Fried has launched an attack on regulators for failing to protect consumers today, even as he admitted he “basically forgot” about an account holding $8bn of customer’s cash.
In Twitter messages with a reporter at the Vox news website, the 30-year-old former billionaire, who had publicly courted regulators and lawmakers in the past, said “f*ck regulators” and claimed his previous overtures towards them were “just PR”.
“They make everything worse. They don’t protect consumers at all,” he wrote.
When told he was previously “really good at talking about ethics” in the industry, he responded: “Ya. Hehe. I had to be. It’s what reputations are made of to some extent.”
Bankman-Fried’s comments come as he continues to scramble to fill an $8bn hole in the exchange’s finances and pay back customers and up to one million creditors.
FTX’s sister firm Alameda has reportedly lost over $8bn in customer funds on speculative bets in the sector, including suffering heavy losses from the collapse of the Terra Luna ecosystem earlier in the year.
Bankman-Fried said the blackhole in its balance book was down to “messy accounting” and the fact FTX forgot that customers had been wiring cash to Alameda.
“Like ‘oh, FTX doesn’t have a bank account, I guess people can wire money to Alameda’s to get money on FTX’”, he said.
“3 years later….’ph god it looks like people wired $8bn to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX’”.
The founders and FTX’s few remaining employees are scrambling to raise money to pay back customers, with the pleas reportedly falling on deaf ears so far.
The founder added that filing for bankruptcy was his “biggest mistake” yet as it restricted the flow of funds back to the exchange, and people were now trying to “burn it all to the ground out of shame”.
It came as the Singaporean venture capital giant Temasek wrote down its mammoth $275m investment in the exchange, following suit with FTX’s other big name backers like Sequoia Capital and Softbanks’ Vision Fund.