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FTX Founder Denies Wire Fraud Despite US$8 Billion Missing from Crypto Exchange

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FTX Founder Denies Wire Fraud

FTX founder Sam Bankman-Fried, who hasn’t been charged with any criminal indictments, has denied attempting to commit fraud while admitting to grave managerial errors over the billions missing from the bankrupt crypto exchange.

In his first major public appearance of Sam Bankman-Fried since the November 11 collapse of FTX and its sister trading house Alameda Research, Sam Bankman-Fried admitted that he “messed up” as CEO of the world’s second-largest crypto exchange.

He admitted that he should have prioritized risk management, customer protection, and connections between FTX and Alameda Research.

“I made a lot of mistakes,” Sam Bankman-Fried told the New York Times DealBook Summit via video link. “There are some things I would give anything to do over again.” I never attempted to defraud anyone.”

Bankman-participation Fried’s was contentious because there are still unanswered questions about how FTX, based in the Bahamas, ended up with a US$8 billion hole in its balance sheet and whether it mishandled customer funds.

Concerns have been raised due to reports that FTX lent client funds to Alameda for risky trades.

He acknowledged that his lawyers had advised him not to participate in the event.

Sam Bankman-Fried stated at the summit that he “didn’t knowingly mix funds.” Simultaneously, he stated that FTX and Alameda Research were more linked than intended and that he failed to notice the trading house’s “too large” margin position.

He stated that he was not running Alameda and was “nervous about a conflict of interest.” At FTX, he said no one was in charge of position risk, calling the lack of oversight a mistake.

During his interview on Good Morning America that aired on Thursday, Sam Bankman-Fried reiterated that he was unaware of improper transactions involving funds fromFTX and Alameda Research while his crypto empire collapsed.

FTXTotally out of control

Sam Bankman-Fried stuck to a difficult-to-parse account of how Alameda Research ran up an incredibly large margin position on the exchange, which shed little light on where client funds ended up.

John Ray, the restructuring expert who took over the FTX in bankruptcy, painted the picture that FTX was mismanaged, out-of-control company. The crypto company was riddled with conflicts and lacked any basic accounting practices. He said it the worst failure of corporate control he’d ever seen.

Bankman-Fried is embroiled in a tangle of lawsuits and regulatory investigations into alleged wrongdoing. Some observers believe his public remarks could be used against him in court.

The spotlight has also been cast on a company culture of hard work and hard play. According to Bankman-Fried, there were no wild parties or illegal drug use. He also stated that he had been prescribed drugs to help him focus and concentrate over time.

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The spread of cryptocurrency

The digital-asset sector is bracing for further contagion from FTX, which had a $32-billion valuation before going bankrupt. It owes $3.1 billion to its 50 largest unsecured creditors, and there is more than a million creditors worldwide.

BlockFi Inc, a cryptocurrency lender, declared bankruptcy on Monday after being battered by the wipeout. Genesis, the troubled brokerage, is attempting to avoid the same fate.

Earlier this week, BlackRock CEO Larry Fink stated at the DealBook summit that now most crypto companies will likely fail after FTX’s demise.

The chaotic unraveling of Bankman-tangled Fried’s web of 100-plus FTX-related entities stung BlackRock, the world’s largest asset manager.

Sam Bankman-Fried has given contradictory accounts of what caused FTX’s problems on social media platorms and in interviews with other news outlets. Advisers overseeing his company’s demise have slammed the lack of oversight.

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Possibility of a hack

As if these difficulties weren’t enough, the exact breakdown of a $662 million outflow from FTX as it went bankrupt remains a mystery. In an interview at the DealBook summit, Bankman-Fried stated that there was improper access to FTX following its spiral.

Another speaker at the New York summit, US Treasury Secretary Janet Yellen, called the FTX debacle “the Lehman Brothers moment within the crypto market,” referring to the 2008 collapse of investment bank Lehman Brothers.

Crypto markets have somewhat stabilized after plummeting in November as the turmoil surrounding FTX intensified.

Nonetheless, a survey of the top 100 digital tokens is down more than 60% for this year, hit by poor monetary policy and a series of crypto meltdowns, the most spectacular of which is FTX.

Bankman-fortune Fried’s once reached $26 billion, and he was recently described as the JP Morgan of digital assets, willing to throw his money around to help the industry. During the interview, he stated that he had only one bank credit card and $100,000.

When asked if he had been truthful about FTX, Bankman-Fried replied, “I was as truthful as I’m known to be.”

The CTNNews editorial team comprises seasoned journalists and writers dedicated to delivering accurate, timely news coverage. They possess a deep understanding of current events, ensuring insightful analysis. With their expertise, the team crafts compelling stories that resonate with readers, keeping them informed on global happenings.

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