[PS: If you’re hitting a paywall, you can use this link]
Sam Bankman-Fried was recently live interviewed by Andrew Ross Sorkin from the New York Times as part of the DealBook summit, an interview which was scheduled before the FTX collapse and remained so.
The summary is that SBF tried to frame the collapse as a series of mistakes, propped by his ignorance on different aspects of accounting, risk management and what was happening at Alameda. As the NY Times reports, parts of his narrative seem to contradict evidence regarding the comingling of funds between FTX and Alameda.
For the most part, SBF also backed off many of the statements he made on Kelsey Piper’s interview, especially regarding what some interpreted back then as him confessing of trying to deceive the public. Besides the occasional mention of donations, there was no mention of effective altruism.
Among some of the things he said:
“Was there comingling of funds?” “I didn’t knowingly comingle funds. (…) I was surprised as to how exposed Alameda’s position was.”
He pointed that he was misinformed by significant discrepancies between post facto accounting and what was informed by their internal dashboards.
“I wasn’t running Alameda, I didn’t know exactly what was going on. (…) Obviously that is a pretty bad mistake on my part, it was a pretty big oversight.”
“When did you think you knew there was a problem?” “November 6. That was the date when the tweet about CZ [Changpeng Zhao] came out.”
He said he entered the interview against the advice by his lawyers. This at least seems to match with the partly incriminatory statements he made during the interview. “There’s a time and a place for me to think about myself and my own future. I don’t think this is it.”
Regarding the interview with Kelsey Piper, he attempted to recontextualize the comments he had made on doing good as merely differentiating between real impact (giving the example of bed nets for malaria) and other instrumental donations “for the business”. His answer was not entirely clear. Regarding public deception, he later declared “I was as truthful as I’m knowledgeable to be, (…) I don’t know of times when I lied”.
Regarding spending on houses and other things, he said it was part of a strategy to attract tech talent for FTX. Specifically regarding buying a property for his parents, he said they had only stayed there temporarily and that it was company property.
As for why investors like Sequoia Capital missed the risk management problems in FTX, he said they were worried about upsides, which is natural in their role as investors.
On drugs, he said he had taken prescribed stimulants for focus, but there was nothing surprising in that. He said reports about parties were greatly exaggerated, “there were no wild parties. At our parties, we play board games.”.
On governance, he said he even thought, “if anything, we had too many boards”. He pointed that even though he believes that there were over 12 boards in different entities with regulatory functions, the problem was that there was no one explicitly in charge of customer risk management.
Finally, he explained that it was still possible to make costumers whole, or at the very least it was entirely possible a month ago (regretting bankruptcy). He pointed out to the existence of several assets which were merely illiquid, and pointed out that FTX US and FTX Japan were probably still completely solvent (as opposed to the larger FTX International).
SBF’s recent live interview at the DealBook Summit
[PS: If you’re hitting a paywall, you can use this link]
Sam Bankman-Fried was recently live interviewed by Andrew Ross Sorkin from the New York Times as part of the DealBook summit, an interview which was scheduled before the FTX collapse and remained so.
The summary is that SBF tried to frame the collapse as a series of mistakes, propped by his ignorance on different aspects of accounting, risk management and what was happening at Alameda. As the NY Times reports, parts of his narrative seem to contradict evidence regarding the comingling of funds between FTX and Alameda.
For the most part, SBF also backed off many of the statements he made on Kelsey Piper’s interview, especially regarding what some interpreted back then as him confessing of trying to deceive the public. Besides the occasional mention of donations, there was no mention of effective altruism.
Among some of the things he said:
“Was there comingling of funds?” “I didn’t knowingly comingle funds. (…) I was surprised as to how exposed Alameda’s position was.”
He pointed that he was misinformed by significant discrepancies between post facto accounting and what was informed by their internal dashboards.
“I wasn’t running Alameda, I didn’t know exactly what was going on. (…) Obviously that is a pretty bad mistake on my part, it was a pretty big oversight.”
“When did you think you knew there was a problem?” “November 6. That was the date when the tweet about CZ [Changpeng Zhao] came out.”
He said he entered the interview against the advice by his lawyers. This at least seems to match with the partly incriminatory statements he made during the interview. “There’s a time and a place for me to think about myself and my own future. I don’t think this is it.”
Regarding the interview with Kelsey Piper, he attempted to recontextualize the comments he had made on doing good as merely differentiating between real impact (giving the example of bed nets for malaria) and other instrumental donations “for the business”. His answer was not entirely clear. Regarding public deception, he later declared “I was as truthful as I’m knowledgeable to be, (…) I don’t know of times when I lied”.
Regarding spending on houses and other things, he said it was part of a strategy to attract tech talent for FTX. Specifically regarding buying a property for his parents, he said they had only stayed there temporarily and that it was company property.
As for why investors like Sequoia Capital missed the risk management problems in FTX, he said they were worried about upsides, which is natural in their role as investors.
On drugs, he said he had taken prescribed stimulants for focus, but there was nothing surprising in that. He said reports about parties were greatly exaggerated, “there were no wild parties. At our parties, we play board games.”.
On governance, he said he even thought, “if anything, we had too many boards”. He pointed that even though he believes that there were over 12 boards in different entities with regulatory functions, the problem was that there was no one explicitly in charge of customer risk management.
Finally, he explained that it was still possible to make costumers whole, or at the very least it was entirely possible a month ago (regretting bankruptcy). He pointed out to the existence of several assets which were merely illiquid, and pointed out that FTX US and FTX Japan were probably still completely solvent (as opposed to the larger FTX International).