It is a bad week for Sam Bankman-Fried’s lawyers, to say the least. The FTX founder and CEO is graduating from his cryptic tweeting to giving jaw-dropping interviews. He’s a wide-open book, answering any questions asked of him. A trio of new interviews, including a live interview with the New York Times, are throwing fuel on the fire.
No crypto event ever has seen coverage quite like FTX’s bankruptcy. In October, the company’s reputation was soaring. It was still riding high from its agreement to acquire BlockFi, it had just acquired Voyager Digital’s remaining assets after an auction win over Binance (BNB-USD), and its name was seeping into the mainstream through advertisement and naming deals.
By November, the perception of FTX did a total 180. Insider reports showed that the company and its sibling companies were heavily reliant on the FTX Token (FTT-USD) it printed out of thin air. Much of the token’s total supply was illiquid as well, with Alameda Research staking much of this supply. The resulting liquidity crunch was fast and dramatic. It would quickly cause the bankruptcy of the whole FTX ecosystem.
Bankman-Fried quickly stepped down from the CEO role as his company folded. However, he did not step down from his self-assigned tweeting duties. The crypto magnate caused more concern as he produced more and more cryptic tweets during this meltdown. This week, Bankman-Fried is speaking up, and louder, much to the chagrin of his legal team.
Sam Bankman-Fried Fesses Up Over FTX Crash
“We messed up big,” Sam Bankman-Fried pointedly told New York Times reporter Andrew Ross Sorkin on Wednesday. The FTX founder was speaking in a live interview at the Times’ DealBook Summit, an event that he attended virtually. The comments made in this interview — and others this week — make for the most astonishing statements yet by Bankman-Fried.
This interview, as well as one by crypto influencer Tiffany Fong and another by Axios this week, feature Bankman-Fried both profusely apologizing and vehemently defending himself. The entrepreneur is taking on accusations of back-dooring and knowingly co-mingling funds between FTX and Alameda Research.
Bankman-Fried seemed visibly shaken as he took on questions live for an audience for the first time since the crash. Much of the time not spent fidgeting in his seat was spent playing ignorant to large post-bankruptcy transactions or profusely apologizing to investors. He attempted to explain away large transactions like the $16 million house in the Bahamas under his parents’ names that he says was meant to be a company property.
This interview, which Bankman-Fried admits he was advised to not give, is a continuation of his defensive press tour. Earlier this week, he did much of the same frantic defending to Axios. There, he defended odd and unprofessional behavior like playing video games during meetings. He also said he over-licensed FTX to make it appear safer than it was.
These interviews add up to one very bad look for the ostracized crypto entrepreneur, whose $32 billion personal empire has shrunk to $100,000 in a single month. The decision behind these appearances is likely tied to the scrutiny Bankman-Fried finds himself under. Regulators are beginning to call him in for questioning. Whether or not these interviews are successful in taking the heat off of him is uncertain. If they’re a peek at how interrogation by regulators will go, though, he’s in for a long legal ride.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.