Sam Bankman-Fried rejects Bernie Madoff comparison, squirms during tense interview
Disgraced FTX founder Sam Bankman-Fried pushed back on critics who have compared him to the late Ponzi schemer Bernie Madoff, even as he deflected questions over whether he might be headed to jail.
The 30-year-old former crypto kingpin claimed during a Thursday interview with ABC’s “Good Morning America” that FTX’s downfall “reads very differently” than the fallout from Madoff’s scheme to bilk investors out of billions during the Great Recession.
That’s despite lingering questions about the billions of dollars that FTX owes to its many creditors in bankruptcy, as well as at least $1 billion in client funds that are still missing.
“A lot of people look at you and see Bernie Madoff,” ABC’s George Stephanopoulos said to Bankman-Fried.
“Yeah, I mean, I don’t think that’s who I am at all, but I understand why they’re saying that,” Bankman-Fried replied. “People lost money and people lost a lot of money. At the end of the day, look, there’s a question of what happened and why and who did what, what caused the meltdown. I think that reads very differently.”
“When you look at the classic Bernie Madoff story, there was no real business there,” Bankman-Fried added. “The whole thing, as I understand it, I think, was one big Ponzi scheme. FTX, that was a real business.”
Bankman-Fried’s ABC interview is part of an ongoing apology tour during a period of mounting legal and regulatory scrutiny over his actions in the days prior to FTX’s collapse. Throughout the interview, the ex-billionaire squirmed in his seat and took long pauses before answering direct questions about his mismanagement.
At one point, Stephanopoulos grilled Bankman-Fried on whether he is afraid he will face jail time over the FTX meltdown.
“There are a lot of things that are worrying me right now,” Bankman-Fried replied. “And, you know, as best as possible, I’m trying to focus on what I can do going forward to be helpful and let whatever regulatory and legal processes that are happening play out as they will.”
Stephanopoulos asked Bankman-Fried to answer, point-blank, whether he knew that FTX client funds were being funneled to help cover risky bets made by the platform’s sister cryptocurrency trading firm Alameda Research, whose CEO was his ex-girfriend Caroline Ellison.
After a lengthy pause, Bankman-Fried said he “did not know that there was any improper use of customer funds.”
Bankman-Fried also reiterated his claim that FTX’s meltdown has effectively destroyed his personal fortune.
“I expect I’m gonna have nothing at the end of this,” he said.
Last month, Reuters reported that Bankman-Fried had secretly transferred $10 billion in FTX client funds to Alameda Research. At least $1 billion of that money has disappeared.
Prominent critics include new FTX CEO John Ray III, a veteran of Enron’s bankruptcy who said accounting practices and corporate governance standards under Bankman-Fried’s leadership were the worst he’s seen in his career.
Court filings and remarks from former employees have revealed lavish spending habits at FTX before its collapse, including $300 million on luxury real estate in the Bahamas and a suite of employees perks that reportedly included all-expenses-paid trips, free massages and an on-site barbershop.
During the interview, Bankman-Fried admitted that he hadn’t spent “any time or effort” on risk management at FTX.
Bankman-Fried also appeared at the New York Times’ DealBook summit on Wednesday, where he said he “didn’t ever try to commit fraud.”
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