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Full Transcript: NY Times' Interview With Sam Bankman-Fried — Transcript

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0:00foreign
0:01[Music]
0:11full transcript NY Times interview with
0:13Sam Bachmann fried Bachmann fryed said
0:15he did not knowingly commingle customer
0:17funds during the interview the New York
0:19Times Andrew Ross Sorkin interviewed
0:21former FTX CEO Sam bankman fraud on
0:23Wednesday November 30th as part of the
0:25times deal book Summit here is a rough
0:27transcript of that conversation read
0:29coindesk's coverage of the interview
0:31Here Andrew or Sorkin we have to have
0:33this conversation as I said at the
0:35outset of today there are a lot of
0:37questions that need to be asked and also
0:39need to be answered as you know a lot of
0:41people have been hurt genuinely hurt and
0:43my hope is that over the time we have
0:45together that we can have a candid
0:46conversation about what happened how it
0:48happened there are people who are angry
0:50and they are seeking answers I just want
0:52everybody in the audience to know that
0:54I've received thousands of letters and
0:55emails even the past couple days from a
0:58lot of these people who feel like
0:59they're victims and some of them have
1:00questioned whether we should have this
1:02conversation or whether we should have
1:03this interview there are people who
1:05don't believe that this conversation
1:06should happen and I just want to say
1:08that I think our job as journalists is
1:10to have those conversations is to ask
1:12those questions and seek those answers
1:14on behalf of the public and that is
1:15especially true right now Sam here's
1:18where I want to start this conversation
1:19if we could I think at this point there
1:22are two ways to view what has happened
1:23at FTX and I know we'll get into all of
1:25the details in a moment but I'm just
1:27going to go very basic there's a
1:29generous View and the generous view is
1:31that you are a young man who made a
1:32series of terrible terrible very very
1:35bad decisions the less generous view is
1:37that you have committed a massive fraud
1:39that this is a Ponzi scheme manipulation
1:41of the system I want to start there
1:43because I think that there's so many
1:44people that have that question which is
1:46what is this and what did happen Sam
1:48Beckman fried yeah thanks for having me
1:50and at the end of the day I was CEO of
1:52FTX and that means whatever happened
1:54whenever it happened I had a duty too
1:56duty to all of our stakeholders to our
1:59customers our creditors I had a duty to
2:01our employees to our investors and to
2:03The Regulators of the world I have to do
2:05right by them to make sure the right
2:07things happen to the company and clearly
2:09I can do a good job with that clearly I
2:11made a lot of mistakes or things I would
2:13give anything to be able to do over
2:14again I did never try to commit fraud on
2:16anyone I I was excited about the
2:19prospects of FTX a month ago I saw it as
2:21a driving growing business I was shocked
2:24by what happened this month and you know
2:25reconstructing it were there things I
2:27wish I had done differently Andrew or
2:29Sorkin let's talk about some of the
2:31things you would want to have done
2:32differently but I don't want this to be
2:33an abstraction for folks because it's a
2:35lot of big numbers and often doesn't
2:37feel human one of the letters I got I
2:39want to read to you Sam because it's
2:41from a gentleman who said that he lost
2:42his life savings and the subject line is
2:44Sam bankman fried stole two million
2:46dollars from me it says Andrew can you
2:49please ask SBF why he decided to steal
2:51my life savings and the 10 billion
2:53dollars from his customers to give to
2:54his hedge fund Alameda can you ask him
2:56why his hedge fund was leveraging long
2:58all of these s coins I'm Gonna Keep it
3:00polite for the kids please ask him if he
3:02thinks what happened was fraud these are
3:04the kinds of letters that I've been
3:06getting repeatedly over the past several
3:07days what do you tell this man Sam
3:09bankman fried yeah I mean I'm deeply
3:12sorry about what happened seriously you
3:14know for long and short of what happened
3:16and I'll start by saying just to make a
3:18distinction here you will get the US
3:20platform you lift the international
3:21platform U.S platforms es regulate
3:24platform with American users to my
3:26knowledge that's fully solvent that's
3:28fully funded and you know I believe that
3:30withdrawals could be opened up today and
3:31everyone could be made whole from that
3:33that none of these problems plagued the
3:35US platform then you have the
3:36international platform for their non-us
3:38users and by that I mean as the letter
3:40says Alameda research did have a long
3:43position and you know the international
3:45platform it's a margin trading platform
3:47it's a derivatives platform it's a
3:49platform where all the clients were you
3:51know going on placing something is
3:53collateral and using that to put on a
3:55position whether that's a Futures
3:56position a spot position or borrow and
3:59you know what the safest story was the
4:01collateral from all of those positions
4:03Alameda research was one of those that
4:05put on positions there and as I try and
4:08reconstruct this you know over the last
4:10month I I have limited access to data
4:12but my my view of it from what I have
4:14been able to see is roughly that you
4:16know basically a year ago Alameda had I
4:18think something like 10 leverage had
4:20something like 10 times the assets of
4:22the position that it had on over the
4:24course of the last year there were a
4:25number of Market crashes that drove the
4:27value of those assets down in the
4:29leverage up I think it was to my
4:31knowledge the Wonder 2x leverage you
4:34know as of a month ago you look at what
4:36happened this month and you know in a
4:38few days all out I mean unclear assault
4:41which led to a total Market collapse in
4:43a pretty short period of time no unclear
4:46liquidity I think more than 10 billion
4:48dollars wiped off in the matter of days
4:50and realistically speaking no ability
4:53for FTX to be able to deliquidate the
4:55position and generate everything that
4:56was owed Andrew or Sorkin I think the
4:58bigger question is where Alameda got the
5:00loan from which is to say that there is
5:02a view that this is about commingling of
5:03funds and in that letter that I just
5:05read to you this gentleman actually
5:07copied and pasted the terms of service
5:09for FTX into the email and I just want
5:11to read you this it says None of the
5:13digital Assets in your account are the
5:15property of or shall or may be loaned to
5:16FTX trading FTX trading did not
5:19represent or treat digital assets and
5:21users accounts as belonging to FTX
5:23trading so how is it possible that
5:25Alameda had this loan of such a large
5:27size Sam Beckman fried so there's that
5:29piece from the terms of service but
5:31there were a number of other parts of
5:32the terms as there's a number of other
5:34parts of the platform on top of that
5:35there is the borrower lending facility
5:37where users were lending billions of
5:39dollars of assets to each other you know
5:41collateralized by assets on the exchange
5:43you had a yacht obviously Futures
5:45contracts where they're leveraged
5:46positions on now of course all of this
5:48it's meant to be the case that these are
5:50positions where FTX could if it needed
5:53to Margin Call those positions and close
5:55them down in time such that it would
5:56cover all of those all those shorts all
5:58those liabilities obviously that wasn't
6:01the case here and that's a massive
6:03failure of oversight of risk management
6:04and have huge diffusion of
6:06responsibility from for myself running
6:07FTX Andrew or Sorkin let's get one one
6:11thing straight was their commingling of
6:12funds that's what it appears like it
6:14appears like there's a genuine
6:16commingling of funds that are FTX
6:17customers that were not supposed to be
6:19commingled with your separate firm Sam
6:21Beckman Friday didn't knowingly
6:22commingle funds and again one piece of
6:25this you have the margin trading you
6:26have you know customers borrowing from
6:28each other Alameda is one of those I was
6:31frankly surprised by how big alameda's
6:33position was which points to another
6:34failure of oversight on my part and a
6:37failure to appoint someone to be chiefly
6:38in charge of that but I wasn't trying to
6:40commingle funds Andrew our Sorkin well
6:42let me ask you this the Wall Street
6:44Journal reported that Carolyn Ellison
6:46told Alameda staffers Alameda used FTX
6:49client funds to cover loans that were
6:50being recalled because of the Luna
6:52triggered credit crunch Carolyn says
6:54that she Sam and Gary were aware of this
6:56how do you square that with what you
6:58originally said over Twitter that this
7:00was an 8 billion accounting mistake Sam
7:02bankman fried so I'll point to two
7:04things and first of all obviously I
7:06don't know what anyone else is thinking
7:08here you know I can only talk about it
7:10from what I know from what I do and a
7:12lot of this is reconstructing it over
7:13the last month I've limited access to
7:15data but you know what it seems like
7:17happened is in the middle of the year a
7:19lot of most of the borrower lending
7:20desks in this space blew out or closed
7:22down and it seems like Alameda had you
7:25know margin positions open with them and
7:27that it likely moved a bunch of that
7:29over tax yes this year when they shut
7:31down and that means you know I think it
7:34was over collateralized positions but
7:36positions that involve substantial size
7:37and substantial US dollar size on the
7:40borrower side in terms of the accounting
7:42mistake again looking through what
7:44happened I think that there is a
7:45substantial discrepancy between what the
7:47financials were what the audience
7:49financials were the true financials what
7:52the exchange understood all of that was
7:54what result was consistent on versus
7:55what the dashboards that we had
7:57displayed for alameda's account there
7:59which substantially under displayed the
8:01size of that position and so that's one
8:02of the reasons I was surprised when we
8:04dug into everything and at how big that
8:06position had become Andrew or Sorkin but
8:09you would agree that there is a much
8:10more more closely connected version of
8:12FTX International and Alameda than
8:14previously understood fair to say sam
8:16bankman fried yeah I mean given the size
8:19of the position I think it was if not an
8:22intention it was in effect tied together
8:24substantially more than I would have
8:25ever wanted it to be Andrew or Sorkin so
8:28given the interview earlier this summer
8:29with Bloomberg and you were asked about
8:31the connection between Alameda and FTX
8:33and you said that obviously can't be the
8:36same place because that's been started
8:37that way and the same original people
8:39but most of the remaining nexuses you
8:41said have dropped off I know the people
8:43at Alameda decently well almost as if
8:46you don't know what's happening there
8:47and there isn't like a large amount you
8:49know of ways that remain that we're
8:50actively working together anything like
8:52that Alameda is a wholly separate entity
8:54they're different offices like different
8:56principal offices we don't have any
8:58shared Personnel we're also not the same
9:00company we not all are under the same
9:02corporate umbrella or anything like that
9:04and yet it seems like Alameda people
9:06were living in the same Penthouse where
9:08you may very well be right now
9:09altogether Sam bankman fried most of
9:11Alameda was not there I don't live there
9:13now but not there now I have not lived
9:16there from time to time but you know I
9:18did live with one or two members of
9:19Alameda for a little while and also say
9:22that you know as I was earlier this
9:24summer looking at the relationship and
9:26this is a pretty big mistaken oversight
9:28of mine I was viewing it primarily from
9:30the trading volume perspective because
9:32that's what drives our revenue and so
9:34when I was looking at how intertwined
9:35our FTX and Alameda you know I was
9:38looking at what what fraction of trading
9:39volume what fraction of liquidity on the
9:41platform did Alameda represent that had
9:44fallen off from something like 45 in
9:462019 to something like 2 percent this
9:48year but in terms of positions and
9:50balances it was a much larger fraction I
9:53hadn't been looking at that that's a
9:54pretty big oversight Andrew or Sorkin I
9:56think the question is whether you were
9:58supposed to have access to these
9:59accounts to begin with you know if you
10:01give if I worked at a bank and was a
10:03bank teller and I decided to leave the
10:04bank at the end of the evening at 10 2
10:06the cash that I sent that we had access
10:08to even if I intended to bring it back
10:11to the bank later even with more money
10:12to give them back I still stole the
10:14money Sam bankman fried I wasn't running
10:16Alameda I didn't know exactly what was
10:18going on I didn't know the size of their
10:20position a lot of these are things that
10:22I've learned over the last month that I
10:24learned as I was sort of frantically
10:25digging into this on November 6 November
10:287th November 8th and obviously that
10:30that's a pretty big mistake I marked
10:32that as a pretty big oversight that I
10:34wasn't more aware of I think I was you
10:35know scared of I was nervous because of
10:37the conflict of interest about being too
10:39involved and obviously that shouldn't
10:41have meant that I didn't have real
10:42oversight or that they really shouldn't
10:44have met that I failed to appoint anyone
10:46to be in charge of that oversight that
10:48relationship but I hadn't been running
10:50Alameda I hadn't been thinking about its
10:52finances I haven't been you know making
10:54those decisions but you know as CEO of
10:57FTX it was still my duty to make sure I
10:59was doing diligence I was I was a large
11:01owner of it that is true and I had had a
11:03lot of exposure on that side Andrew R
11:05Sorkin why hadn't you been focused on it
11:08if in fact that's actually where the
11:10profits were Sam bankman fried well I
11:12don't know that that's where I mean I
11:14think Alameda had made trading profits
11:16over the last few years but FTX had made
11:18profits as well FTX had been a
11:20profitable growing business and I was
11:22that was more than a full-time job I
11:25didn't have the bandwidth to run to
11:26companies at once I have the you know
11:28attention for it and again I was nervous
11:31about conflict of interest between those
11:33two and so was pretty intentional about
11:35not being very involved in what was
11:36happening at all Andrew or Sorkin when
11:39did the commingling of assets begin Sam
11:41bankman fried so they didn't you know
11:43lots of Traders had opened margin
11:45positions on FTX where they would have
11:47borrows of assets where they would be
11:48short some asset against you know
11:50against other assets is collateral that
11:53being said I again looking through this
11:55now I think that that position size for
11:57Alameda got substantially larger over
11:59the course of 2022 and that it was I
12:01think substantially larger by October
12:032022 probably by July of 22 than it had
12:06been in April Andrew our Sorkin it
12:08sounds like it's fair to say that there
12:10was is always a connection between
12:11Alameda and FTX it became almost not
12:14almost but from the very very beginning
12:16and then it never really stopped Sam
12:18bankman fried well I think it had been
12:20in some ways reducing I mean when you
12:24scroll back to 2019 Al London FTX were
12:26very connected in a number of ways you
12:28know one of these was that Alameda was
12:30the primary liquidity provider on FTX it
12:33was you know 40-something percent of
12:35volume it was the backstop liquidity
12:37provider and you scroll forward to 2022
12:39it was down to two percent of volume we
12:41had a lot of backstop liquidity
12:43providers but we still had a big margin
12:45position on and I was failing to pay
12:47nearly enough attention to positions and
12:49positional risk on the exchange into
12:51elementas in particular and I also
12:53frankly made a mistake that I feel
12:55pretty embarrassed to have made a lot of
12:57these are but I substantially
12:58underestimated what the scale of market
13:00crash could look like and what the speed
13:01of it could look like and how poorly it
13:03would Andrew or Sorkin which is it that
13:05just suggests that you were just hoping
13:07perhaps hoping against hope that this
13:08would all work out and then nobody
13:10therefore would realize what this
13:12commingling was all about Sam Bachmann
13:14fried so it's not how I viewed it and in
13:17particular again most of the firms had
13:19margin positions most of the firm type
13:21borrows on FTX the problem here this one
13:24was this was too big and I was surprised
13:26by it Andrew or Sorkin it sounds like
13:28there were assets that may have been
13:30allowable to be loaned but then there
13:31were assets that weren't allowable to be
13:33loaned no Sam bankman fried so I'm still
13:36looking into the details of some pieces
13:38of this but I do think that in addition
13:40to what I've seen as sort of law of the
13:42standard borrows here that we scroll
13:43back to 2018 or to 2019 I guess FTX
13:47didn't have bank accounts it didn't have
13:48any bank accounts globally we were
13:50trying to get them it took us a while it
13:52took us a few years and you know there
13:55are customers who wanted to wire money
13:56to FTX and so I think in the meantime
13:58some of them were wiring money to
14:00Alameda research to get credited on FTX
14:02and I think that was a substantial sum
14:04and I think that the ftx's internal
14:06accounting didn't correctly effectively
14:08try to debit Alameda for those funds but
14:10it didn't happen in the primary account
14:12and so it didn't happen it created a
14:14discrepancy between the display of the
14:16account and what was really going on
14:17there and I'm still looking into exactly
14:19how that how that worked mechanically
14:21but I that that did make that position
14:23size substantially larger than I thought
14:25and I think than what you would have
14:26gotten from from both normal Avenues
14:28Andrew or Sorkin what do you make of the
14:30argument that Alameda was used to
14:32effectively wash money into FTX that
14:34American investors who by the way were
14:37not technically allowed to even invest
14:38on FTX we're doing so and FTX was doing
14:41it knowingly because the know your
14:42customer rules were being flouted by
14:44using this separate vehicle Sam bankman
14:46fried how would that have allowed
14:48customers to flout the know your
14:49customer rules are you talking about
14:51people who are trading on ftxu or are
14:53you talking about customers of FTX
14:55International Andrew or Sorkin
14:56International you just said that there
14:58was money being sent to Alameda and that
15:00Alameda was then providing credits onto
15:02FTX Sam bankman fried but those users
15:04still had to go through the know your
15:06customer policy on FTX in order to use
15:08that ramp customer still had to go
15:10through ftx's normal kyc onboarding
15:13Andrew or Sorkin so when do you think
15:15you knew there was a problem Sam backman
15:17tried the time that I really knew there
15:18was a problem was November 6th November
15:216th was the date that the Tweet about
15:22ftt came out by late on November 6th we
15:25were putting together all of the data
15:27putting together all the information
15:28that obviously should have been put
15:29together way earlier that obviously
15:31should have been part of the dashboards
15:33I was always looking at and I you know
15:35when we looked at that there was a
15:37potential serious problem there and
15:39alameda's position was big on FTX they
15:41had just taken a huge hit they had taken
15:43huge hits over the course of the year
15:44but that was a particularly large one
15:46and very abrupt and we're seeing a run
15:48on the bank start and that was leading
15:50to four billion dollars a day of client
15:52withdrawals at that point you know we
15:54started calling prospective sources of
15:56financing because I was nervous about
15:58what was going to happen there you know
16:00if you rewind even a few days I was a
16:02little bit nervous but not on nearly the
16:04same scale and I was thinking about you
16:06know risks that were substantially less
16:08Andrew or Sorkin you say you were
16:10nervous you were nervous though company
16:12was going to go under you were nervous
16:13you were gonna get caught what were you
16:15nervous about Sam bankman fried like on
16:17November 6th or before that Andrew or
16:19Sorkin either Sam bankman fried so I
16:22think before then what I was nervous
16:23about was that basically and this
16:25started I would say November 2nd or so
16:27when there was the leak of the Alameda
16:28balance sheet to coindesk and what I
16:30started too think a bit more about this
16:32I was nervous that that would lead to
16:34substantial losses for Alameda and that
16:36you know it would be a bit messy I
16:38didn't think it was existential for FTX
16:40I didn't think it was going to lead to a
16:42massive loss for ftx's customers I was
16:44thinking of this as more like Alameda is
16:46going to be really tight on funds than
16:47that you know maybe it would end up
16:49having some small impact on FTX but not
16:52a significant one not one that hurt
16:53customers at all when you're talking
16:55about November 6th late November 6th
16:57then and especially as we bleed into
16:59November 7th and 8th I started to become
17:01nervous that FTX is not going to be able
17:03to fulfill customer withdrawals and by
17:05late November 6th I am very nervous
17:07about that and I'm starting to think
17:09about lie like emergency scenarios and
17:11I'm starting to think about like things
17:14might end quite badly here and the core
17:16metric that I'm thinking of there is
17:17will we be able to make sure all
17:19customers are whole and you know on
17:21November 5th I was feeling quite good
17:23about that on November 7th I was feeling
17:26quite uneasy about that Andrew or Sorkin
17:28were going to go back in time for a
17:30moment this summer you were described
17:31oftentimes as the JP Morgan of crypto
17:34referencing the 1907 Panic that he
17:36helped prevent and you had purchased
17:38block Phi were making investments in
17:40Voyager and all sorts of other things
17:42when you were doing that at that time
17:44how much of that was an effort to prop
17:46up the value of things like ftt which
17:48was the token of FTX knowing that if a
17:50company like block Phi which owed a ton
17:52of it that if it collapsed ftt would
17:54collapse and in large part the
17:56collateral that you had for Alameda
17:57would collapse Sam bankman fried so I
18:00don't think any of the borrow lending
18:01desks to my knowledge own a lot of ftt I
18:04think a lot of them may have been taking
18:05it as collateral I don't think they
18:07owned it though or we're gonna sell it
18:09and I think that most of them ended up
18:11closing down effectively all of their
18:12lines with Alameda one way or another
18:14and so at that point I think that that
18:16was close to a sunk cost and so I wasn't
18:18viewing it as having any impact on ftt
18:20in particular I did view it as important
18:23for the industry's health I did view it
18:25as a thing where I wanted to try to keep
18:26the industry stable but I don't think it
18:28had any really large ftt specific impact
18:30Andrew or Sorkin you didn't think it
18:32would have had any impact on Alameda or
18:34FTX if for example block 5 were to have
18:37failed Sam bankman Friday don't think it
18:39would have a large direct impact and the
18:41reason I say that is that I believe that
18:43Alameda ended up returning the vast
18:44majority of its open borrows of its
18:46margin positions with the borrower
18:48lending desks in the middle of this year
18:49anyway and so at that point there wasn't
18:51that much left too safe from that I you
18:55know the at that point I think the
18:56bigger thing was just not one in the
18:58industry to implode Andrew or Sorkin
19:00let's talk about collateral because I
19:02think this entire experience has been a
19:03revelation for a lot of people about
19:05what might be collateral and clearly you
19:07were using ftt and Solana and other
19:09tokens as lateral and part of that
19:11required you to mark them in a specific
19:13way a value to them do you think that
19:15you were marking them properly Sam
19:17Beckman Friday don't think I was marking
19:19them the way I wish I had from a risk
19:20perspective and I want to differentiate
19:22here like expected value or others like
19:24Worth or something like that from
19:26security and you know I think that I
19:28don't have any strong statements to make
19:30about you know what value they're a sign
19:32from sort of like an upside perspective
19:34or even a median case perspective but
19:36clearly I was I was not nearly cautious
19:39at all from a downside perspective from
19:41the extreme downside perspective and you
19:44know I can tell you in my head I was
19:46looking at a 30 down move over a
19:48three-day period as a sort of like
19:49extreme tail case event that you know
19:52we'd seen once before an end then you
19:54know what happened here was a 95 down
19:56move over the course of a year in a you
19:58know sixty percent down move over a few
20:00day period with very little liquidity
20:02and all happening at once in all of
20:04these points in a correlated fashion in
20:05which Hedges didn't mean as much also
20:07because this was a specific crash on
20:09assets associate with Alameda research
20:11rather than all assets and so even
20:13correlated Hedges had limited use there
20:15and run on the bank at the same time and
20:17all that are things in retrospect I
20:19should have expected might happen in an
20:20extreme scenario because that's how
20:22markets work and you know we've seen
20:24other examples of that in history where
20:26when things get really bad they get
20:28really bad for all the relevant things
20:30at once in a very directing correlated
20:32and Quick Way Andrew or Sorkin I want to
20:35go to the block Phi acquisition for a
20:37moment how much money do you think
20:38Alameda I'd say that they had a lot of
20:40ftt but that Alameda had borrowed from
20:42block 5 at the time of the bailout Sam
20:44bankman Friday honestly don't know but I
20:47would have guessed like 100 million
20:48maybe couple hundred million but I
20:51honestly don't know the answer and I
20:52wasn't paying detailed attention that's
20:55my guess Andrew or Sorkin and then were
20:57you using ftt and serum and other things
20:59to collateralize the loans at block Phi
21:01do you think this goes to the whole idea
21:03of both the value of these things and
21:05also whether you are trying to buy block
21:06Phi in fact to continue to support
21:09effectively Alameda over FTX Sam bankman
21:12fright it might be I would guess it was
21:13but but you know to your point my guess
21:15is that like the amount paid for for
21:17Block Phi is probably bigger than the
21:18amount that Alameda had opened with it I
21:20mean I don't know that for sure I get I
21:22but I wasn't even looking at what that
21:24number was really but I think that's
21:25that's about right Andrew or Sorkin I
21:27want to go back to the Alameda piece of
21:29it for just another moment if you stick
21:31with me here you told investors and
21:33Regulators that you are not involved in
21:34Alameda decision making and yet in this
21:37case Alameda invested 1.15 billion
21:40dollars in Genesis Digital assets GDA
21:43without your consultation or approval
21:45that's the question and my understanding
21:47is you also served on the boards of
21:48Genesis Digital assets and so I'm trying
21:51to understand how you wouldn't have been
21:52involved with Alameda Sam bankman fried
21:55so I was somewhat involved with Venture
21:56investing and that was done out of a
21:58separate entity than alameda's
21:59proprietary trading then its activity on
22:01FTX or other crypto exchanges but I was
22:04consulted on some of its VC Investments
22:06including with GDA Andrew or Sorkin what
22:09are your lawyers telling you right now
22:10are they suggesting this is a good idea
22:12for you to be speaking Sam bankman fried
22:15there very much not I mean you know what
22:17it was the classic advice right don't
22:19say anything you know recede into a hole
22:22and I certainly am and it's not who I
22:24want to be I don't have a duty to talk
22:26to people I have a duty to explain what
22:28happened and I think I have a duty to do
22:30everything I can to try and do what's
22:31right is there anything I can do to try
22:33and help customers out here and I don't
22:35see what good is accomplished by me
22:36sitting locked in a room pretending the
22:38outside world doesn't exist Andrew or
22:40Sorkin you're in the Bahamas right now
22:42are you in the Bahamas because you think
22:44you can't leave Sam bankman fried I'm in
22:46the Bahamas I've been in the Bahamas for
22:48the last year and I've been running FTX
22:49from the Bahamas I've been running FTX
22:52digital Market our primary operating
22:54entity down here with the Bahamian
22:55regulators and and others in in contact
22:58an eye you know right now I'm looking to
23:01be helpful anywhere I can with any of
23:02the global entities that you know that
23:04would want my help Andrew or Sorkin do
23:06you think you could come to the United
23:07States or go elsewhere Sam bankman to my
23:10knowledge I could Andrew or sore can
23:12have you thought about doing that Sam
23:14bankman fried I thought about it and you
23:16know I mean I've seen a lot of the all
23:18these unclear that they've been
23:19happening I would not be surprised if
23:21you know sometimes I am you know up
23:24there talking about what happened to our
23:25Representatives or wherever else is most
23:27appropriate Andrew or Sorkin How
23:29concerned are you about criminal
23:30liability at this point Sam Bachmann
23:33fried so I don't think that I mean
23:34obviously I don't personally think that
23:37I have you know but I think the real
23:39answer is it's not sounds weird to say
23:41but but I think the real answer is
23:42that's not what I'm focusing on there's
23:44going to be time and a place for me to
23:46sort of think about myself in my own
23:48future but I don't think this is like
23:49right now I mean like I've had a bad
23:52month this is not like that's not what
23:55matters like what matters here is the
23:57millions of customers what matters here
23:59is all the stakeholders in FTX who got
24:01hurt I'm trying to do everything I can
24:03to help them out and as long as that's
24:04the case like I don't think that you
24:07know what happens to me is the important
24:08part of that and I don don't think
24:10that's what it makes sense for me to be
24:11focusing on Andrew or Sorkin Sam help me
24:15with this on November 7th you tweeted
24:17and then deleted a tweet that said FTX
24:20has enough to cover all client Holdings
24:21we don't invest client assets even
24:23treasuries we've been processing all
24:25withdrawals and will continue to be you
24:27then deleted that tweet and literally
24:29just moments ago you told me it was on
24:31November 7th that things took a turn Sam
24:33bankman fried yep Andrew or Sorkin
24:36you're telling the truth Sam bankman
24:38fried so things were changing fast and
24:40you know when you look at November 6th I
24:43was feeling nervous but I felt like
24:45things were probably going to end up
24:46okay we still had I mean you know assets
24:49weigh larger than liabilities and yet
24:51there's increasing withdrawal demand but
24:53we weren't meeting all that we were
24:54processing all of it although it was a
24:57weekend so we were a day delayed on a
24:58lot of wire transfers and stablecoin
25:00Creations and Bitcoin nodes were
25:02overloaded like their assets were
25:03processed by November I did not think
25:05the odds were that high that we were
25:06going to be able to meet all client
25:08demand and I was worried that there was
25:09going going to be a substantial
25:10liquidity shortfall November 7th that
25:13was sort of the transition day and you
25:15can just see the start versus the end of
25:16November 7th I felt fairly different you
25:19know and I can't remember exactly what
25:21is in here or where I said that but you
25:23know I remember trying to think about
25:24feeling conflicted about what to say and
25:26try and think about what I could say
25:27that I believed and you know bye not
25:30that long later I no longer believe that
25:32I know longer felt like it had much like
25:34that was at all reasonable
25:35representation of where my mind was at
25:37and I don't remember exactly when I
25:39deleted it but I remember at some point
25:41I was like that shouldn't be there
25:43Andrew or Sorkin let me ask a different
25:45question because this is all around the
25:46same time the New York Times reported
25:49that 515 million dollars was
25:51suspiciously transferred from FTX
25:52wallets after the bankruptcy filing and
25:55there have been accusations that this
25:56instance is effectively theft where did
25:58that money go Sam bankman fried so I
26:01will caveat this by saying at that point
26:02I was being cut off from systems and so
26:04on I'll give you the answer to the
26:06extent that I know it which is that I
26:08believe that a few different things
26:09happen and within a short period there I
26:11think that the U.S Keem took action to
26:13see some of the assets and put them in
26:15custody for the exchange I believe that
26:17it has been announced that you know the
26:19Bahamian Regulators took some of the
26:21assets into safekeeping as well around
26:23that same time and I think there is an
26:25addition to both of those there's also
26:26been some actual improper access of
26:28assets on the exchange and I don't know
26:30the details of that I don't have the
26:32resources to trace through exactly what
26:34happened there and I don't know who is
26:36behind that third part Andrew or Sorkin
26:38want to go back to one thing about the
26:39Bahamas but the payment authorities have
26:41now admitted effectively that they
26:42ordered the transfer it sounds like of
26:45certain FTX assets under its control
26:46after the U.S bankruptcy was filed did
26:49you help them with that did you discuss
26:51that with them Sam bankman fried so I
26:53can't discuss specifics but I will note
26:55that prior to chapter 11 having been
26:57filed the Bahamian authorities had
26:58placed FTX digital markets the Bahamian
27:01entity was the primary operating entity
27:03of FTX International under the
27:04supervision of a JPL system in the
27:06Bahamas with oversight from the
27:08Securities Commission of the Bahamas and
27:10you know bored to my knowledge taking
27:12actions to protect ftm's clients on any
27:14customers there Andrew or sore can just
27:17go back for just one second and I
27:18apologize for belaboring this point but
27:21we're talking about FTX and the
27:22derivative piece of it earlier and I
27:24made a note earlier about this because
27:25you were told the Senate said you were
27:27sitting in the Senate at the time on
27:28February 9 2022 during the year and you
27:31said FTX U.S derivatives all of these
27:33contracts are fully collateralized Sam
27:36backman fraud was that true yes and
27:38again FTX U.S to my knowledge totally
27:41solvent FTX U.S derivatives totally
27:44solvent and in fact I believe that FTX
27:46U.S derivatives Ledger X may even be up
27:49and running right now I'm confused why
27:51FTX us is not processing customer
27:53withdrawals right now I would think it
27:56should be because I believe to my
27:57knowledge that it could be and it could
27:59make all Americans 100 whole from this
28:01and FTX U.S derivatives as I said there
28:04doesn't even allow leverage of any sort
28:06it was close to a spot trading platform
28:08and so yeah to my knowledge All American
28:10customers and All-American regulated
28:12businesses and exchanges here are I
28:14think at least in terms of client assets
28:16are okay obviously I don't know what's
28:19happened with you know you can make your
28:21own judgments about the Enterprise value
28:23of those businesses Andrew or Sorkin but
28:26over the summer you paid a 2.5 billion
28:28dollar loan to Barry silbert's Genesis
28:30this was in August and I'm just trying
28:32to think through the Dynamics of what
28:33might have been happening to your firm
28:34and was wondering where did the money
28:36come from Sam bankman fried so you say
28:39we did that I presume that it's Alameda
28:41research that did that yes that's the
28:43case so I don't have all of the details
28:45there but my understanding is that and I
28:47don't know exactly what is going on in
28:49Genesis side then but my understanding
28:51is I believe Genesis tried to call in a
28:53large number of loans from Alameda I
28:55believe that happened and that closed
28:57down a lot of positions that Alameda had
28:59opened with Genesis and other trading
29:01desks and that was what I was thinking
29:02at the time that's what I think happened
29:04there I also think that may have led to
29:06an increase in position size of Alameda
29:08on FTX in retro respect Andrew or Sorkin
29:10you did an interview I think perhaps
29:12inadvertently over Twitter DMS with a
29:14reporter at Vox and had spoken about ESG
29:16but also about what you described as
29:18shibboleths what it meant to look good
29:20in Corporate America today and that a
29:21lot of the things that you were doing
29:22were not necessarily things you actually
29:24believed or believed in please speak to
29:26that Sam bankman fried yeah absolutely
29:29and I was frustrated this was not meant
29:31to be a public interview it was a long
29:33time friend of mine who I stupidly
29:35forgot was also a reporter I thought I
29:37was speaking in a personal capacity I'm
29:39not sure what they thought the capacity
29:40was at the time but it certainly ended
29:43up being reported on and you know what I
29:45would say is look there are a lot of
29:46things I think of really massive impact
29:48on the world and ultimately that's what
29:50I care about the most and I mean I think
29:53that I think frankly that you no unclear
29:56industry could could have substantial
29:58positive impact but you know I was
30:01thinking a lot about you know bug Nets
30:03and malaria about saving people from
30:05diseases no one should die from the
30:07Animal Welfare about pandemic prevention
30:09and you know what can be done on a large
30:12scale to help mitigate those those
30:14things I think matter and there's you
30:15know amongst the most important things
30:17for me separately from that there is a
30:20bunch of that regulated
30:21companies do to Trend good and these are
30:23things that everyone who does them
30:24basically knows they're kind of dumb
30:26that these are not things that are
30:27making large impact on the world these
30:29are not looking at saving one thousands
30:31of lives you know these are the kinds of
30:33Lights you know if it's like three
30:34different quarterbacks for a touchdown
30:36in the same game for the same team will
30:38donate two used cars to charity type
30:40campaigns where it's not going to happen
30:41it's never happened there's no
30:43expectation of a car getting donated
30:45it's just a PR campaign sort of
30:47masquerading as do gooderism and you
30:49know things like green washing are
30:51things which I think end up in a similar
30:52area Andrew are Sorkin fair to say you
30:55participated in this Sam bankman fried
30:57yeah we all did and I and you know FTX
31:00did as well and there are things I felt
31:02like we needed to do for the business
31:03there are things that I felt like were
31:05crucial for us being able I mean it's I
31:08wish the world didn't work this way I
31:10wish that these weren't relevant to your
31:11ability to get regulated to your ability
31:13to get bank accounts but they they
31:15weren't I yeah you know we had
31:18promotional campaigns we had you know
31:20marketing slogans and you know we
31:22thought about what we could do too and
31:24you know we thought of ourselves as
31:26legitimately trying to do good but we
31:28also thought about what we could do to
31:29make sure that our image reflected that
31:31and there's a lot of just unimpactful
31:32things there that ultimately I mean in
31:35some circles got more attention than
31:37actually impactful things and you know I
31:39think that on the more tasteful end of
31:41the spectrum you can see you know things
31:43like a small scale but real charitable
31:45initiatives and on I think the less
31:48tasteful end of the spectrum you know
31:50Frankly Speaking I mean even things like
31:53making sure that all materials of
31:54perfect English grammar is a thing where
31:56that was important to me Andrew or
31:58Sorkin so let me ask you about this
32:00though because the other piece of it is
32:02using your money and influence and I
32:04think there's a question about whose
32:05money you were using but to donate for
32:07example to the Democratic party in large
32:09part to influence regulation and I think
32:12as people have looked through now some
32:13of the regulation you were pushing for
32:15at the cftc for example some of that
32:18regulation would have allowed you
32:19frankly to quote self-certify a lot of
32:21what was going on at FTX and there are
32:23people who look at that and say it was
32:25all part of a scheme Sam bankman fried
32:27so unpacking pieces that when you look
32:29at like this the cftc regulation there
32:31ultimately there may have been an
32:33ability to self-certify contracts but
32:35prior to that we went through a
32:37congressional hearing a public comment
32:39period a public Roundtable a year of
32:42inquiries and tens of thousands of hours
32:44you know thousands of pages of submitted
32:46documents and still had not gotten to
32:48the point of having a license to offer
32:49emerging Futures in the United States
32:51and so it was an extraordinarily long
32:53and hard process that we're going
32:54through the cftc and I you know it was
32:57by far the most intensive regulatory
33:00process that I've ever seen Andrew our
33:02Sorkin can you speak to the lobbying
33:03piece of it though and the donations
33:05piece of it because I think that's
33:06become part of the story as to whether
33:08you effectively were influenced
33:09lawmakers to do your bidding and given
33:12the state of your current company
33:13questions about whether that should be
33:14the case Sam bankman fried so I mean
33:17lawmakers were not ruling on FTX FTX
33:20didn't have an application before
33:21Congress for anything you know my
33:24donations were mostly for pandemic
33:25prevention and they were looking at
33:27primary elections where there were
33:28candidates who were outspoken in favor
33:30of doing things now to prevent the next
33:31pandemic that was the primary thing that
33:34I was supporting with those
33:35contributions and you know it was on
33:37both sides of the L primarily operating
33:39both primaries because it wasn't I
33:41wasn't doing it as a person exercising
33:43or not you know this was not looking at
33:45donating to one party to beat the other
33:47one in the general elections here I you
33:49know is Not only was it on both sides
33:51but even within each side it was between
33:53two candidates in the same party and
33:55you're looking at pandemic policy Andrew
33:57or Sorkin where did the money come from
33:59for those donations Sam bankman fried so
34:02I you know basically profits I mean it
34:05was substantially smaller than the
34:06amount of trading profits that Alameda
34:08had made over the prior years Andrew or
34:10Sorkin related to this you had a meeting
34:12with Gary Gensler you also met with the
34:14folks at the cftc do you think you
34:17needed to buy your way into those
34:18meetings Sam bankman fried I mean I
34:21don't think I need to buy my way into
34:22them I do think it was harder than I
34:24would have thought it would be to get to
34:25the point of being even able to have
34:26meetings with some regulators and I mean
34:29I spent hundreds of hours probably
34:31thousands of hours in DC trying to get
34:33to the point where I could even have
34:34meetings with with you no some of the
34:37relevant Regulators but that was not a
34:39that wasn't a money thing and I mean
34:41there's no donations to Gary Gensler he
34:44doesn't even have a campaign to donate
34:45to in the first place that was like
34:47elbow grease I mean that was just asking
34:49again and again and again to have
34:51meetings with relevant regulators and
34:52you know submitting hundreds and
34:54thousands of pages of documents Andrew
34:56or Sorkin you also made big investments
34:58in number of media companies and I think
35:01that's raised a lot of questions about
35:02whether you were trying to buy influence
35:04can you speak to that Sam bankman fried
35:06I mean Media Matters a lot and I want
35:08support good media event Adventures that
35:10was the whole thesis there and I you
35:12know I don't have like governance over
35:13any of these I wasn't looking for
35:15governance over them I was looking to
35:17support journalists doing great work
35:19because I think what they do is really
35:20important and I think that there needs
35:22to be critical eye on stories I'm
35:23certainly seeing being on the honor
35:25getting the brunt of a lot of that right
35:26now and you know frankly I think it's
35:29healthy for the world that there is real
35:30investigative journalism Andrew or
35:32sorkiner parents or law professors what
35:35did you tell them when all of this
35:36happened Sam Beckman fried I mean I
35:38don't remember exactly when I reached
35:40out to them but you know I think I
35:42called them up and said hey guys I think
35:45there might be a problem like things
35:46alameda's position might be imploding
35:48here and there might be liquidity issues
35:50and I'll tell you more when I know more
35:52that is that's my guess about roughly
35:54roughly what I said but honestly that
35:56that week so much happened it's a little
35:58bit of a blur to me exactly what was
35:59said Andrew or Sorkin and what are they
36:01telling you now Sam bankman fried and
36:04look it's been it's been a hard period
36:06for anyone who was close to me and none
36:07of them deserve that and I feel really I
36:10mean look a lot of obviously the largest
36:13number of people who are hurt here were
36:15customers and I feel incredibly bad
36:16about that but anyone who is close to me
36:18you know including my parents including
36:21employees co-workers who you know fought
36:23with the company to push forward were
36:25hurt by this and bore no responsibility
36:27for that I feel really bad about that
36:29and I mean I feel really grateful for
36:31the support my parents are still giving
36:33me you know throughout all of this
36:35Andrew or Sorkin can you explain the
36:37real estate piece of this to us I think
36:39there's been a number of headlines as
36:40you know about FTX the company buying a
36:43lot of real estate up in the Bahamas
36:44where you lived at least at the time was
36:47owned by the company but then there's
36:49also reports that your parents signed
36:50and were effectively provided with what
36:52seemed like a vacation home Sam bankman
36:55fried so I don't know the details of the
36:56house for my parents but I knew that it
36:58was not intended to be their long-term
37:00property I know it was intended to be
37:02the company's property I don't know how
37:03that was papered in and I think that was
37:05where it was was it will end up I think
37:07they may have stayed there while working
37:09with the company sometime over the last
37:11year when you look at the rest of it
37:13there were a lot of property purchases
37:14in the Bahamas you know the reason for
37:16that is we had you know a hundred you
37:19know basically a hundred Silicon Valley
37:20you know top Silicon Valley employees
37:23come down here to work for FTX and you
37:25know we were trying to incentivize that
37:27in two you know make sure that they had
37:29an easy way to find a comfortable life
37:31that they'd be willing to move and and
37:33help build out the product and so you
37:36know those hundred people put together
37:37here did end up buying a substantial
37:39amount of property so it kind of I feel
37:42bad about some of how those Investments
37:43may turn out for them Andrew or Sorkin
37:45can you just speak to the idea of this
37:47company that at least from the public
37:48perspective seemed like a regulated
37:51company or something that was very
37:52focused on compliance you would go to
37:54Washington you'd talk about compliance
37:56you talk about trust crypto ultimately
37:58is actually about trust it's about not
38:01having to trust others frankly it's
38:03supposed to be a trustless system that's
38:05why everyone trusted so much supposedly
38:06but it seems like when you read the
38:08stories it sounds like a bunch of kids
38:10who are on Adderall having a sleepover
38:12party Sam bankman fried I mean like look
38:15I screwed up I was CEO I was the CEO of
38:19FTX and I mean I say this again and
38:21again that that means I had a
38:22responsibility that means that I was
38:24responsible ultimately for doing the
38:26right things and I mean we didn't like
38:28WWE messed up big Andrew or Sorkin but
38:31there were people that were telling you
38:32you needed more compliance Sam bankman
38:35fried there were but I think that
38:36compliance we were spending an enormous
38:38amount of our energy on compliance we're
38:40spending an enormous amount of energy on
38:42regulation on licensure we're getting
38:44licensed in dozens of jurisdictions I
38:46think frankly we're spending probably
38:48too much of our industry getting
38:49licensed in retrospect and you know
38:51there were some places where I think
38:53that the reporting and transparency
38:55obligations from the licensure actually
38:57did help I think when you look at I mean
38:59FTX U.S derivatives I think when you
39:01look at FTX Japan which I think is fully
39:04solvent which I think could make all
39:05customers whole tomorrow they were I you
39:07know the sort of relevant unclear
39:10confused why it hasn't but I but you
39:13know I think that a lot of what we ended
39:15up doing and focusing on was a
39:16distraction to some extent from one
39:18unbelievably important area that we
39:20completely failed on and that was risk
39:22that was risk management that was you
39:24know customer position risk and you know
39:26frankly conflict of interest risk and
39:29you know there was no person who was
39:31chiefly in charge of positional risk of
39:33customers on FTX and that feels pretty
39:35embarrassing in retrospect because that
39:37was you go back to 2019 even 2018 and
39:40asked me why am I starting to build out
39:42FTX what's the point of it and what I
39:44would have said was look existing crypto
39:47derivatives exchanges have large risk
39:49management failures that every day there
39:50are millions of dollars that are being
39:52lost by customers because of risk
39:54management failures that these contracts
39:55are paying out 75 cents on the dollar
39:58week after week after week because of
40:00risk management blowouts and that that
40:01needs to be overhauled and that was what
40:03I was focused on for the beginning of
40:05FTX I was not focused on that for the
40:07last year or two I got less grounded
40:09from that and I started focusing on the
40:11bigger picture on you know future
40:13business Avenues on on licensure on a
40:15lot of things and I mean we lost track
40:18of a really important part of the
40:19business and of the product and so there
40:22absolutely were management failures huge
40:24management failures like their
40:25responsibility for that there were
40:27oversight failures transparency failures
40:30reporting like so many things we should
40:32have had in place I think that a lot of
40:34it was on the risk management side
40:35Andrew R Sorkin let me ask you about
40:38that which is we have Larry Fink here
40:40today and he had a stake in FTX and
40:42Sequoia and Paradigm and some very big
40:44Venture Capital firms had given you
40:46money and I'm curious if they ever asked
40:47you questions about this risk management
40:49and whether they bear any responsibility
40:51for what Clearly Now appears that you're
40:52saying was it minimum a lack of
40:54oversight if not something much worse
40:56Sam bankman fried I don't think that
40:59they're responsible like when you look
41:00at like put yourself in the eyes of an
41:02investor of a venture capital firm what
41:04you're thinking about primarily is
41:06upside right what you're thinking about
41:08primarily is investing in a private
41:10company and thinking might this 3x might
41:12this 5x might this even 10x on the
41:15upside cases and yet there's some chance
41:17that we'll go down there's some chance
41:18that maybe it will go down to zero but
41:20that's counterbalanced by the upside
41:22propositions here and so most of what
41:24they were focused on was you know I
41:26think like what might FTX become what's
41:29the pathway to get from here to there
41:30you know what would it take what are the
41:32missing pieces you know rather than
41:34you're at the point where you're
41:35dwelling on all of the various precise
41:37downside scenarios and risks for a
41:39prospective Venture investment that
41:41means you're not investing like if
41:42that's where your head's at you know if
41:44you think the odds are that that's where
41:46things are going to end up why why would
41:48you do that investment Andrew or Sorkin
41:50can I ask about the drugs you have
41:51tweeted about it Caroline has tweeted
41:53others have tweeted about uppers and
41:55downers and all sorts of things there
41:57have been pictures taken of something
41:59called the msam which apparently
42:00increases levels of dopamine to the
42:02brain to treat Parkinson's were you
42:04taking that patch Sam bankman fried so
42:07it's funny I had my first sip of alcohol
42:09after my 21st birthday and I have maybe
42:12half a glass of alcohol a year roughly
42:14speaking there were no wild parties here
42:16when we had parties we played board
42:19games and you know 20 of people would
42:21have three quarters of a beer each or
42:23something like that and you know the
42:25rest of us would not drink anything I
42:26didn't see any illegal drug use around
42:28me here at the office at these parties
42:30and when I say parties like you know
42:32having people over for dinner is what
42:34that meant and look I can't talk about
42:36anyone else like what they're prescribed
42:39between themselves and their doctors or
42:40psychiatrists I can say for me I don't
42:43know I've been prescribed various things
42:45at various times to help with focus and
42:47concentration and I think they have done
42:48that I haven't felt any of the sort of
42:50impacts that I think people have been
42:52theorizing here from it and it's not a
42:54huge impact in the first place anyway I
42:57think these have all just been totally
42:58on label use of medications and I think
43:00these have on the margin helped me focus
43:02a little bit I wish I had been a lot
43:04more focused over the last year Andrew
43:06or Sorkin I may have been unfocused in
43:08this last moment because I actually
43:09wanted to follow up on the question when
43:11we're talking about Venture capitalists
43:12Sequoia and Paradigm invested in you but
43:16there have now been questions about the
43:17fact that you invested in them and
43:19whether these were what some people
43:20describe in the business round-trip
43:22deals can you speak to that Sam bankman
43:24fried I think well after they invested
43:26in FTX and I don't know the details but
43:29there may have been a small investment
43:30into some of their funds I think it was
43:32something that we did because and I
43:34don't believe in what they're doing it
43:36seemed like a good opportunity and I
43:37didn't think too much about it Andrew
43:39are Sorkin curious just on a very
43:41personal level because we are close to
43:43ending this conversation to the degree
43:44that there's been a lesson in this and
43:46that what you see is your future at this
43:47point I know you're taking it day to day
43:49obviously and I know you're an optimist
43:52as well we've talked about that but what
43:54do you think realistically is your
43:56future Sam bankman fried so what is my
43:58future I don't know what my future is
44:00and you know when you fast forward I
44:03have no idea what I'm gonna be doing you
44:05know a long time from now when I look at
44:07the near and medium term what am I
44:09thinking what I'm thinking is that again
44:11I don't know what's going to happen and
44:14a lot of not my hands at this point but
44:16I want to be helpful wherever I can to
44:17Regulators administrators and I think
44:20we're working to help ftx's customers
44:21and I want to be helpful wherever I can
44:23on anything that could help bring a lot
44:25more value to those customers and you
44:27know I don't know where that will lead I
44:29can say that prior to filing there had
44:31been a lot of interest in financing a
44:34lot of Fairly strong interest you know
44:35many billions of dollars worth I can't
44:38make any promises about anything but I
44:40would have thought that there would be a
44:41chance for a pathway forward here that
44:43would bring more value to customers than
44:44what would happen if you just sort of
44:46sold everything else for scraps and I
44:48don't have confidence I can't promise
44:49you and I can't promise anyone anything
44:51there and it's not really in my hands to
44:53a large extent but I would think that it
44:55would make sense to be exploring that
44:57because I think there's a chance that
44:58customers could end up a lot more whole
45:00I don't know maybe even fully whole if
45:03there was a really strong concerted
45:04effort Andrew or Sorkin and how would
45:06that happen Sam Beckman fried so there
45:09have been examples of this before in
45:11crypto history where that happened
45:12obviously you can look at what happened
45:14with bitfinex back a number of years ago
45:16where it got hacked and then ended up
45:18making over a few year period customers
45:20whole there are a lot of assets that are
45:22on hand here although many of them are
45:24not liquid they were worth quite a bit
45:26more than the new liabilities a month
45:27ago even a lot of them a year ago you
45:31know there's at least a month ago there
45:32were or I guess three weeks ago billions
45:35of dollars of potential funding
45:37opportunities you know I don't know that
45:39it would have been great for my state as
45:40a shareholder of FTX but that's not what
45:42matters here and I think it would have
45:44brought more financing to customers you
45:46saw obviously the Tron facility which
45:48was open for a little while on FTX which
45:51allowed some customers to get liquidity
45:52and you put some of these together
45:54there's obviously you want equity in the
45:56business where's that lead I don't know
45:58exactly and again it's not going to be
46:01my decision to make at the end of the
46:02day but I think there's a Shot For Real
46:04value Andrew or sork and Sam we're gonna
46:06have to wrap up and a couple of quick
46:08other questions one is given what you
46:11know about compliance or the lack of it
46:13in this business in this industry I
46:15think there are a lot of people who are
46:16holding crypto today perhaps on
46:18exchanges like binance and other places
46:20what should they think given what you do
46:22know and to the extent that you can tell
46:23us the truth about what you know Sam
46:25backman fried what should they think and
46:27I presume you are asking what should
46:29they think about the safety of their
46:31assets going forward Andrew or Sorkin
46:33correct Sam bankman fried yeah so look I
46:36don't I obviously don't know exactly
46:38what's going on at other exchanges I can
46:40tell you what I would think as a
46:41customer you know if I were a customer
46:43here which is look for the things that I
46:45wish FTX had been able to supply things
46:48like proof of reserves is helpful look
46:50for as rigorous of that as you can look
46:52for regulatory reporting right you look
46:54at what FTX had in place in Japan you
46:57look at what ftxus derivatives had with
46:59frequent reporting to Regulators of
47:01exactly what customer assets balances
47:03liabilities distributions are Andrew or
47:06Sorkin what about the governance piece
47:08what about the governor its peace
47:09because one of the things we have not
47:11talked about is you had no board and you
47:13had no CFO and that should have been a
47:15red flag frankly for all of us Sam
47:17bankman fried so interestingly in some
47:20ways we had too many boards we had feed
47:22Cuts Andrew or sorkinot goodness
47:25hopefully we're gonna get him back in
47:27just a moment if we can thank you for
47:29indulging us we are almost finished with
47:31this with this interview are we getting
47:33back in tight just for one second if we
47:35could we try to bring Sam back just to
47:38complete this interview thanks everybody
47:40for sticking with us we are going to be
47:42back with Sam bankman fried I believe in
47:44just just literally a moment as they
47:45connect the feed Sam thank you for
47:47coming back we were in the middle of the
47:49conversation about no board no CFO and
47:52you said something which I think raised
47:54a lot of eyebrows here you said you
47:55thought you had too many boards Sam
47:57bankman fried yeah can you hear me here
47:59Andrew or Sorkin yep we can all hear you
48:02Sam bankman fried cool so we didn't talk
48:04that much but there's a board of FTX
48:06Japan there's a board of FTX U.S
48:08derivatives FTX Australia FTX Singapore
48:12FTX Europe you know we had I think more
48:15than a dozen boards when you look at all
48:18of the entities put together and you
48:20know many of these boards had regulatory
48:22functions I think the problem to some
48:24extent was okay sure you have all these
48:27boards but at the end of the day when
48:29push comes to shove who is the person
48:30who's in charge of global or the board
48:32or the function that's in charge of
48:34global site customer risk management
48:35like you know there's a diffusion of
48:38responsibility to some extent on that
48:40front and you know there needed to be I
48:43think a single or a small set of
48:45entities whether aboard people of
48:46responsible parties that were sitting
48:48there saying I feel responsible for what
48:50happens on FTX and you know we had we
48:53had actually audited financials from the
48:55FTX finances perspective we had
48:58infrastructure but from the customer
49:00risk and finances perspective much less
49:02Andrew or Sorkin Sam how much money do
49:05you have left at this point Sam bankman
49:07fried I mean to my knowledge close to
49:09nothing I mean everything was just in
49:11the companies I mean it's no no I don't
49:14have any hidden funds here everything I
49:16have I'm disclosing and you know I'm
49:18down too I have one working credit card
49:20left I think it might be one hundred
49:22thousand dollars or something like that
49:24in that bank account and I mean
49:26everything that I had even all the loans
49:28I had were you know those are all things
49:31I was reinvesting in the businesses I
49:33put everything I had into FTX Andrew our
49:35Sorkin let me ask you two final
49:36questions were you truthful with us
49:38today Sam bankman Friday was as truthful
49:41as I you know I'm knowledgeable too B
49:43there's some things I wish I knew about
49:45more but yes I was Andrew or Sorkin so
49:49let me ask you this do you agree that
49:51over time you also lied Sam bankman
49:53fried I don't know of times when I lied
49:55I think look there are certainly times
49:57when I was acting as a representative as
49:59a marketer for FTX and what I was
50:01looking for how can I in a way which is
50:03truthful like you know paint FTX as
50:06compelling away as possible as exciting
50:08enough optimistic away as possible and
50:10you know I wasn't thinking about I
50:13wasn't talking about what are the risks
50:14involved with FTX you know there I
50:17obviously wish that I'd spent more time
50:18dwelling on the downsides and less time
50:20thinking about the upsides Andrew our
50:22Sorkin Sam bankman fried I want to thank
50:24you for this interview I hope that some
50:26of the answers have been helpful as
50:28we've tried to understand and untangle
50:29what is a still tangle story Sam I know
50:32that this has been a difficult
50:33conversation and a tough conversation
50:35and on behalf of everybody here and on
50:37behalf of the public I want to thank you
50:38for engaging in it at a time in truth
50:40when I know you've been advised not to
50:42so thank you so very very much thank you
50:45Sam bankman fried everybody thank you
50:50foreign
50:51[Music]

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