Sam Bankman-Fried, co-founder and former CEO of the now-bankrupt FTX, was interviewed Wednesday at the New York Times’s DealBook Summit.
The interview was live and virtual with Bankman-Fried doing his humble best at damage control even though, as interviewer Andrew Ross Sorkin said, he had “been advised not to.”
Here are a few key points from the interview, with quotes from Bankman-Fried.
1. Sam was still very sorry.
"You were hurt by this and you have no responsibility for that. I feel really bad about that. I feel really grateful for the support that my parents are still giving me,” he said.
This is one talking point Bankman-Fried has maintained since his first Twitter post on the FTX collapse. Between his T-shirt and downcast glances, it seems like Bankman-Fried is hoping people will realize he’s just a misguided kid — who has a shortfall of $3.2 billion in customers’ money.
2. And speaking of his parents …
The house purchased in Bankman-Fried’s parents' name in the Bahamas does not really belong to his parents.
When asked about his parents’ involvement, Bankman-Fried was quick to exonerate them.
“I don't know the details of the house for my parents, but I knew that it was not intended to be their long-term property," he said.
"It was intended to be the company's property. I think they may have stayed there while working with the company sometime over the last year. There were a lot of property purchases in the Bahamas. We had 100 top Silicon Valley employees come here to work for FTX.”
3. Sam thought FTX may have spent too much time on compliance.
This response revealed more about the perspective of the speaker. From Bankman-Fried’s point of view, too much energy was put into compliance and not enough considering customer risk. That still does not explain why attending to both was not possible.
“We were spending an enormous amount of our energy on compliance, an enormous amount of energy on regulation, and on licensure. We were getting licensed in dozens of jurisdictions," he said.
"I think, frankly, we were spending too much energy getting licensed. A lot of what we ended up focusing on was a distraction from one unbelievably important area that we completely failed on and that was customer position risk.”
4. Sam didn’t blame FTX’s VC backers.
When asked if big venture capital firms such as Sequoia and Paradigm bear any responsibility for not vetting FTX’s risk management, Bankman-Fried was similarly quick to clear their name, though the logic behind his waving away their responsibility is perhaps questionable.
“I don't think they bear responsibility. Put yourself in the eyes of an investor of a venture capital firm. What you're thinking about primarily is the upside. Right? What they're thinking primarily is investing in a private company, and thinking, might this be 3x or 5x? Might this even be 10x?" he said.
"Yeah, there's some chance that maybe it will go down to zero. But that's counterbalanced by the upside propositions here.”
It seemed like Bankman-Fried believed he was absolving the VCs, by arguing that they didn't have the customer in mind at all, just the odds of making a big return on their investment.
5. Sam said stories of parties and drugs were greatly exaggerated.
The interviewer asked Bankman-Fried about drug use mentioned through his Twitter account. He was ready to downplay the role substances played as negligible in the collapse of FTX.
“It's funny hearing this. I had my first sip of alcohol after my 21st birthday. There were no wild parties here. When we had parties, we played board games and 20% of people would have three-quarters of a beer. The rest of us would not drink anything," he said.
"I can't talk about anyone else and what their prescriptions are is between themselves and their doctors or psychiatrists. I have been prescribed various things at various times to help with focus and concentration. And I think they have done that. These have all just been totally on-label use of medications.”
6. Sam wasn’t sure what the future holds.
Bankman-Fried may feel ill-equipped to predict his near-term future. At this juncture, he can’t be sure what form his legal problems may take.
“I don't know what my far future is. I don't know what's gonna happen. And a lot of is not in my hands at this point. But I, I want to be helpful wherever I can to regulators, administrators, you know, internationally who are working to I, you know, to help FTX's customers, and I want to be helpful wherever I can, on anything that could help bring a lot more value to those customers," he said.
7. Sam was out of money.
Bankman-Fried was famous for being young and wealthy, at one point having been estimated to have $10.5 billion in personal wealth. Now the interviewer asked if he had anything at all left.
“I don't have any funds here. Everything I have, I'm disclosing. I'm down to one working credit card left and that might be $100,000 or something like that. I had put everything I had into FTX.”
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