Crypto billionaire whose net worth plummeted from $26bn to $100k speaks out
Topics: Cryptocurrency, Money, News
Jake Massey
Featured Image Credit: Sipa US / South China Morning Post / Alamy Stock Photo
Topics: Cryptocurrency, Money, News
A cryptocurrency billionaire whose net worth plummeted from $26 billion to $100,000 has spoken out.
Sam Bankman-Fried, the former CEO of the failed cryptocurrency exchange FTX, was once one of the richest people in the world on paper, but now he's claimed he only has a comparatively measly $100,000 (£82,440) to his name.
FTX failed in the cryptocurrency version of a bank run - when customers tried to withdraw their assets all at once because of growing doubts about the financial strength of the company.
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Since its collapse, FTX's new management has called the cryptocurrency exchange's management a 'complete failure of corporate controls'.
Bankman-Fried has done a handful interviews since FTX collapsed in mid-November, but yesterday (Wednesday 30 November) was his first video interview since the company filed for bankruptcy protection on 11 November.
The 30-year-old said that he took responsibility for FTX's collapse and said he failed to grasp the amount of risk FTX and his other company Alameda Research were taking on across both businesses.
Speaking at the New York Times' DealBook summit via a video-link from the Bahamas, he said he now has 'close to nothing' and admitted that his businesses 'completely failed' with regard to risk management, which was 'pretty embarrassing in retrospect'.
"Whatever happened, why it happened, I had a duty to our stakeholders, our customers, our investors, the regulators of the world, to do right by them," he said.
Bankman-Fried has been accused of allowing Alameda to use customers' assets in FTX to place bets in the market.
Exchanges like FTX are supposed to segregate customers' deposits.
Other financial companies have landed themselves in hot water for misusing customers' deposits - one example being MF Global roughly 10 years ago.
Bankman-Fried insisted that he did not 'knowingly' co-mingle customers assets with Alameda and said he believed that millions of angry customers would eventually be reunited with their funds.
He said that he largely believed the US affiliate of FTX was entirely solvent and could start processing withdrawals at once.
As for the rest of FTX - which was significantly larger than the US division - he said the fate of customers' funds were largely out of his control at this point.
John Ray III, the new chief executive of FTX, condemned the management of the company in a filing with the US bankruptcy court for the district of Delaware.
"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," he said.
"From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented."