In his image protecting crisis management, Sam Bankman-Fried has now walked into what seems to be the most self-perjuring interview thus far as he faces this time an angry Crypto Twitter mob, many of whom had fallen victim to the the demise of crypto exchange FTX.
This was the first public interview on Twitter that SBF went through after his recent phone interview with known whistle blower reporter Tiffany Fong. Up until now, the Twitter sentiment of SBF has been akin to an apologetic mushroom living in self-denial.
In interviews leading up to this one, SBF had said that FTX US had enough funds to pay customers back, to which Crypto Twitter did not believe an ounce of, simply because they were unable to withdraw their funds after FTX halted withdrawals during its meltdown.
The speakers in the Twitter space, organised by IBCGroup Fund CEO Mario Nawfal, were out in full force towards getting SBF to admit to fraudulent conduct. They came in with stabbing questions, putting SBF in uncomfortable positions multiple times as he parried with round-the-bush vague replies. However, going through the barrage of pointed questions for nearly an hour, SBF eventually cracked from the fatigue and played himself.
During the interview, it was revealed by Ran Neuner’s line of questioning that deposited funds into spot trading accounts, never actually arrived into the exchange’s account. Riding on technicality, the process for users to deposit into FTX from a US bank account was only through the Alameda hedge fund. He also said spot trading funds are supposed to be backed 1:1 by the exchange and to be used only by the user.
What FTX made users believed to be deposited funds were actually “notional figures on a computer screen” and that the actual “money never left the Alameda account to the exchange”, hinting that they credited customers through Alameda which, violated the Terms of Service and was fraudulent conduct.
Neuner : “That’s the part that I’m that I’m trying to understand because that would make sense as to why Alameda had so much money to invest in projects and FTX didn’t have any money to pay out to customers. Right?”
SBF : “Yeah. So I believe that was part of the story and again. I’m not 100% confident, I’m working with what I have here but I believe that that what you said is effectively part of what happened.”
SBF quickly back pedalled to refuting having full knowledge of the actual events. “You know, it wasn’t just a pure crediting of the customer and there was a transfer from one account to another but that debit didn’t clearly show up as a debit on Alameda’s main account.”
The wishy-washy answers was a consistent theme in SBF’s near two-hour grilling. When asked how Alameda was able to withdraw funds from FTX using FTT as collateral, he called it a “feature of the platform”, that all users were able to withdraw assets as long as it was over collateralised.
He went into surface-level technicality, citing that he did not expect the price of FTT to go down by more than 50%, which he pointed that it was mainly bad accounting and bad oversight. Upon going deeper into the technicalities of the leverage product offered by the exchange, he answered with ease and structure.
However when it came to specifics about Alameda & FTX and his involvement, he was often falling back to phrases such as “I was not aware of the details when they happened” ,”I had a lot going on” & “I lost track of important things”.
The phrases were consistent enough that speaker Kim Dotcom frustratedly pointed out that SBF had said “I don’t have the details” 116 times during his interviews with the Department of Justice and questioned “why he had so little information about your companies including the facilitated real estate deals”, to which SBF replied “unfortunately, I don’t have access to that data right now.”
Eventually the conversation fatigue set in after nearly 2 hours. SBF was candidly sending messages to Naufal saying “I gotta go, I gotta go, I gotta go” while he politely announced to the rest of the speakers that he needed to “hop off”.
In the closing remarks, Naufal addressed the users who were most affected by the crash of FTX, citing concern for those that lost their whole life savings in the crash.
Naufal: “What’s next for you in the next few weeks? What can the people that were hurt by this expect?
SBF: Um. I mean, look, I’m incredibly sorry about what happened, and I know that doesn’t change anything. I’m gonna do what I can, even if that’s not much. But at the end of the day, you know, hopefully, there will be pathways that we’ll be able to get more funds back for users, give value back to users. You know, a lot of that’s not going to be up to me. I’m just going to try and be helpful where I can there, but I’m, I’m sorry.”
Neuner: “Sam you keep saying you’re going to do as much as you can. You said it when you went to the liquidators and when you went into Chapter 11. I’m trying to understand in in your head what do you think you can do in your current position given the fact that the liquidators in the US side have said that you know you’re no longer involved and and that you no longer speak on behalf of the company. In your head, when you talk about doing whatever you can and trying to to do it, what what do you think is in your hands?
SBF: I am sorry I’m very late, I do have to hop off now but I all I can do is I can be helpful to you know, all the teams who who want me to globally and you know I’m going to continue to to do that. You know if and when I’m asked and you know look for other ways over time that I can you know hopefully help contribute but yeah there’s you know, there’s a limit to how much, you know.
SBF said ‘you know’ 9 times.
After SBF “hopped off”, the panel wasted no time and went into full discussion mode, to really put SBF on a stake. Neuner described that FTX’s accounting decision to credit money to FTX users, while holding deposited funds meant for spot funds in Alameda’s account and spending that money for Alameda’s operations was “80% of what actually went wrong for SBF” and is “fraudulent in every country.”