Former FTX CEO Sam Bankman-Fried had not planned on testifying to Congress today. When lawmakers asked Bankman-Fried to give insight into his company’s collapse, he had assumed he would be able to testify when he was ready to. Now, he doesn’t have to worry about it at all, since he’s under police custody in the Bahamas. The FTX hearing is underway, and Bankman-Fried is unable to come to the stand, be it on his own accord or through a subpoena. So, it’s unclear when we will finally get to see Bankman-Fried questioned in front of lawmakers. We do, however, know what statements he would have come prepared with.
Some back and forth between Bankman-Fried and House Representative Maxine Waters revealed that the crypto CEO was hoping to buy some time and collect more data related to his company’s collapse. Waters and a pair of senators were not prepared to let Bankman-Fried off the hook so easily, requesting him to testify.
While Bankman-Fried reiterated earlier this week that he would not testify, the point seems to be moot. The crypto exec was arrested by Bahamian authorities after U.S. prosecutors levied a barrage of fraud and money-laundering charges against him, among others.
Nonetheless, Bankman-Fried prepared a lengthy statement in anticipation of testimony at some point or another. Forbes published the testimony early on Tuesday, in which he attempted to explain what had happened to catalyze FTX’s implosion.
In preparation for his eventual testimony in front of Congress, Sam Bankman-Fried compiled a statement. The 18-page document by the crypto pariah details, presumably under oath, what happened to FTX and the fallout. It also combats some of the most popular conspiracy theories about FTX perpetuated both online and within Bankman-Fried’s circles.
Sam Bankman-Fried Testimony: FTX Founder Drags New Executive, Rival CEO
Opening one’s testimony to Congress by admitting fault isn’t really a good look. But, it seems Bankman-Fried is taking a vulnerable, open approach in explaining his company’s meltdown. “I know that it doesn’t seem to mean much to say that I’m sorry,” says Bankman-Fried. “I’m dedicating as much of myself as I can to doing right by customers.”
The former CEO spends much of the statement explaining, in a very general way, how FTX fell apart. He denies supplying investor funds to Alameda Research. Though, he notes that the company had a significant margin position. When it couldn’t cover during the November market crash, it cascaded into the bank run that bankrupted his company.
The ex-exec goes on to slam the bankruptcy process at length. Particularly, he speaks out against the company’s new CEO, John Ray III, and FTX U.S. General Counsel Ryne Miller. Bankman-Fried blames Miller for pressuring him to sign bankruptcy documents and turn over the CEO role to Ray. He also commented that Ray, for all of his complaints of FTX’s poor bookkeeping, has not responded to Bankman-Fried’s offers to assist in the bankruptcy process. In addition, Bankman-Fried makes sure to throw digs at Binance (BNB-USD) CEO Changpeng Zhao, whom he asserts catalyzed the bank run and ensured its competitors’ demise.
Among many other details, the FTX founder fights against a grip of conspiracy theories surrounding the company. He denies, for example, manipulating Tether (USDT-USD) to bankrupt Three Arrows Capital, saying that Three Arrows Capital’s demise set the market conditions that allowed his own company’s collapse. He denies allowing Alameda view trades and assertions FTX is working with the Ukrainian government. Rounding out his statement, Bankman-Fried balked at conspiracy theories related to his prescription drug use and ethnicity.
It’s unfortunate that investors will need to wait longer to see Bankman-Fried taking on hard questioning from Congress. But, this statement is a good summary of what we can expect from him in the future. In the meantime, he is making his first appearance in court today following his arrest.
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.