Sam Bankman-Fried is again trying to clear the air.
In an interview with Tiffany Fong published Tuesday, the disgraced FTX founder and former CEO explained why FTX prioritized Bahamian withdrawals—and also said he’s narrowed down who might be behind that shady $650 million “hack” the night of the Chapter 11 bankruptcy filing.
“I’ve narrowed it down to like eight people. I don’t know which one it was,” he said, suggesting that it was either a former FTX employee or someone who installed malware on a former employee’s computer.
As far as how FTX ended up in the mess it currently finds itself in, Bankman-Fried, also known as “SBF,” told Fang that the collapse of his exchange’s token FTT led to a bank run not because of any margin calls directly, but because of a massive sell-off driven by fear.
Faced with a liquidity crisis and forced to admit that the exchange did not hold one-to-one reserves of client funds, FTX froze withdrawals for all customers on November 9. The next day, FTX announced that Bahamian “regulators” ordered it to enable withdrawals for its citizens. The Bahamian SEC later denied that regulators ever made such a demand. In reality, SBF told Fong he was simply prioritizing Bahamian withdrawals because “that’s where I am right now.”
SBF claimed the withdrawals weren’t for insiders.
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In less than a week, one of the largest and most trusted crypto exchanges went up in flames, along with its crypto celebrity founder and CEO Sam Bankman-Fried. Dan Roberts, Stacy Elliott, and Kate Irwin from the gm podcast walk you through exactly how it happened, what it means for you, their own takes on the most interesting subplots, and what we can learn from it all. Plus: We review some comments SBF and CZ made on this podcast that look remarkable in hindsight. Watch and make sure to subscribe to the gm podcast on Apple or Spotify.
“It was critical to the exchange being able to have a future,” SBF said of the decision. “You do not want to be in a country with a lot of angry people in it.”
While SBF appears to have prioritized users in his country of residence for what seems like his own safety and his bankrupt company’s “future,” he admitted it was a “shitty” thing to do.
“The pathway forward for FTX involved Bahamians not being pissed at it,” he said.
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A day after FTX filed for bankruptcy, the firm’s hot wallets were drained by hackers, walking away with nearly $650 million in altcoins. Now, after various bridgings and on-chain chicanery, the attacker is left with holdings of more than $367 million across various major blockchains. The attacker laundered proceeds using decentralized exchanges (DEX) and cross-chain bridges, reported blockchain intelligence firm Arkham Intelligence. A total of almost $20 million in PAXG was frozen across the a...
In the interview, SBF also denied the allegations that he built a “back door” into FTX’s system to siphon $10 billion worth of funds to sister company Alameda Research. Bankman-Fried founded crypto trading firm Alameda in 2019 but then officially stepped away from day-to-day operations in 2021.
“I don’t even know how to code,” Bankman-Fried said. “I literally never opened the codebase for any of FTX.”
But before Bankman-Fried lost access to FTX’s systems, he said he was “exploring” FTX’s “systems” to try to determine who moved the hundreds of millions of dollars from FTX’s accounts without company permission.
“I don’t know exactly who because they shut off access to the systems when I was halfway through exploring it,” SBF said.
