FTX’s Sam Bankman-Fried: “I F*cked Up”

FTX’s Sam Bankman-Fried: “I F*cked Up”

Sam
Bankman-Fried, the struggling CEO of beleaguered cryptocurrency exchange, FTX, broke his silence on
Thursday, taking to Twitter to explain and apologize for the dire situation that FTX is in, hinting at a “particular sparring partner,” adding that “well played;
you won.”

In a series of tweets, Bankman-Fried admitted that he could have
handled the FTX situation better, starting with “I’m sorry. That’s the biggest thing. I
fucked up, and should have done better,” he tweeted.

“I
also should have been communicating more very recently. Transparently–my hands
were tied during the duration of the possible Binance deal; I wasn’t
particularly allowed to say much publicly. But of course, it’s on me that we
ended up there in the first place,” he wrote in a 22-part Twitter thread.

Over the course of the Twitter thread, Bankman-Fried explained that FTX US users are unaffected and “fine”, and he is “not sure” what is going to happen moving forward.

In addition, the 30-year-old CEO attributed a big part of the collapse to the $5 billion in withdrawals made on Sunday, which was “the largest by a huge margin.”

FTX – Binance Drama Not Over Yet

Towards the end of the thread, Bankman-Fried appeared to take a jibe at Binance, unsubtly referring to the world’s largest crypto exchange as a “particular sparring partner” who he will have “more to say about.” This suggests the FTX-Binance drama is far from over yet.

The
comments came as Binance pulled out of the deal on Wednesday to acquire the non-US operations of FTX
following the latter’s liquidity crisis.

The
company cited the state of FTX’s corporate due diligence, “latest news reports
regarding mishandled customer funds,” and “alleged US agency investigations” for
the move. However, the company also noted in the same tweet that “outliers that
misuse user funds will be weeded out by the free market.”

The
comments appear to be a continuation of the supposed ‘tension’ between
Bankman-Fried and Binance CEO, Changpeng Zhao. Recall that before Binance
initially agreed to acquire FTX, Zhao last Sunday announced that his exchange
would be withdrawing “the remainder of its $530 million FTX Tokens (FTT)
due to recent revelations that have come to light.”

Industry
analysts believe that the move by Binance, in addition to the revelation that
FTT was the single biggest asset on Alameda’s balance sheet, contributed
to the liquidity crisis that engulfed FTX. Zhao, later that Sunday,
described the decision as a “post-exit risk management,” adding that the
exchange “won’t support people who lobby against other industry players behind
their backs.”

On
Monday, Bankman-Fried responded, writing about a “competitor” that was “trying
to go after us with false rumors” in a now deleted post. He added that
FTX “had enough to cover all client holdings” in another part of the Twitter
thread. “We don’t invest client assets (even in treasures). We have been
processing all withdrawals, and will continue to be [sic].”

He continued “FTX has enough to cover all client holdings. We don’t invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be.”

‘Not
a Win’

However,
in between these subtle jabs, the rival CEOs sometimes put up a cooperative
front. While announcing Binance’s proposed takeover on Tuesday, Bankman-Fried
described Binance as committed to “a more decentralized global economy,” adding
that “we are in the best of hands.”

Also, before Binance pulled out of the
deal, Zhao shared a note on Wednesday sent by the exchange to all its teams
across the world.

In
the note, Zhao noted that his exchange “did not master plan” the fallout or
“anything related to it” that FTX was experiencing. He also urged his team not
to view FTX’s situation as a “win for us”, adding that “user confidence is
severely shaken.”

“Regulators
will scrutinize exchanges even more. Licenses around the globe will be harder
to get. And people now think we are the biggest and will attack us more,” he
explained.

What’s Next?

With Bankman-Fried now scrabbling around to find a way to save his crumbling crypto empire, there are many questions about the conduct of FTX that remain unanswered as well as new questions emerging on a daily basis.

As new details emerge and rumours of wrongdoing persist, what is known, is that this drama is far from over yet.

Sam
Bankman-Fried, the struggling CEO of beleaguered cryptocurrency exchange, FTX, broke his silence on
Thursday, taking to Twitter to explain and apologize for the dire situation that FTX is in, hinting at a “particular sparring partner,” adding that “well played;
you won.”

In a series of tweets, Bankman-Fried admitted that he could have
handled the FTX situation better, starting with “I’m sorry. That’s the biggest thing. I
fucked up, and should have done better,” he tweeted.

“I
also should have been communicating more very recently. Transparently–my hands
were tied during the duration of the possible Binance deal; I wasn’t
particularly allowed to say much publicly. But of course, it’s on me that we
ended up there in the first place,” he wrote in a 22-part Twitter thread.

Over the course of the Twitter thread, Bankman-Fried explained that FTX US users are unaffected and “fine”, and he is “not sure” what is going to happen moving forward.

In addition, the 30-year-old CEO attributed a big part of the collapse to the $5 billion in withdrawals made on Sunday, which was “the largest by a huge margin.”

FTX – Binance Drama Not Over Yet

Towards the end of the thread, Bankman-Fried appeared to take a jibe at Binance, unsubtly referring to the world’s largest crypto exchange as a “particular sparring partner” who he will have “more to say about.” This suggests the FTX-Binance drama is far from over yet.

The
comments came as Binance pulled out of the deal on Wednesday to acquire the non-US operations of FTX
following the latter’s liquidity crisis.

The
company cited the state of FTX’s corporate due diligence, “latest news reports
regarding mishandled customer funds,” and “alleged US agency investigations” for
the move. However, the company also noted in the same tweet that “outliers that
misuse user funds will be weeded out by the free market.”

The
comments appear to be a continuation of the supposed ‘tension’ between
Bankman-Fried and Binance CEO, Changpeng Zhao. Recall that before Binance
initially agreed to acquire FTX, Zhao last Sunday announced that his exchange
would be withdrawing “the remainder of its $530 million FTX Tokens (FTT)
due to recent revelations that have come to light.”

Industry
analysts believe that the move by Binance, in addition to the revelation that
FTT was the single biggest asset on Alameda’s balance sheet, contributed
to the liquidity crisis that engulfed FTX. Zhao, later that Sunday,
described the decision as a “post-exit risk management,” adding that the
exchange “won’t support people who lobby against other industry players behind
their backs.”

On
Monday, Bankman-Fried responded, writing about a “competitor” that was “trying
to go after us with false rumors” in a now deleted post. He added that
FTX “had enough to cover all client holdings” in another part of the Twitter
thread. “We don’t invest client assets (even in treasures). We have been
processing all withdrawals, and will continue to be [sic].”

He continued “FTX has enough to cover all client holdings. We don’t invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be.”

‘Not
a Win’

However,
in between these subtle jabs, the rival CEOs sometimes put up a cooperative
front. While announcing Binance’s proposed takeover on Tuesday, Bankman-Fried
described Binance as committed to “a more decentralized global economy,” adding
that “we are in the best of hands.”

Also, before Binance pulled out of the
deal, Zhao shared a note on Wednesday sent by the exchange to all its teams
across the world.

In
the note, Zhao noted that his exchange “did not master plan” the fallout or
“anything related to it” that FTX was experiencing. He also urged his team not
to view FTX’s situation as a “win for us”, adding that “user confidence is
severely shaken.”

“Regulators
will scrutinize exchanges even more. Licenses around the globe will be harder
to get. And people now think we are the biggest and will attack us more,” he
explained.

What’s Next?

With Bankman-Fried now scrabbling around to find a way to save his crumbling crypto empire, there are many questions about the conduct of FTX that remain unanswered as well as new questions emerging on a daily basis.

As new details emerge and rumours of wrongdoing persist, what is known, is that this drama is far from over yet.

Published at Fri, 11 Nov 2022 10:19:12 +0100

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