(NYT Dealbook Summit Livestream screenshot. Courtesy of NYT.com)
A lot of polemics followed the decision of NYT Dealbook Summit to extend an invitation for SBF to be one of its keynote speakers. It became a matter of concern whether it was acceptable to give a forum and voice to the main perpetrator of the biggest financial fraud of the last decades. FTX mismanagement and fraudulent practices had cost its customers and investors more than $10 billion.
NYT journalist and summit host Andrew Ross Sorkin defended his decision to go forward with the participation of FTX's disgraced CEO as a matter of journalistic integrity and an opportunity to ask all the difficult and important questions in person. As per his Twitter claims "No questions are off limits".
Though at first SBF had confirmed that he would participate in person, he later backtracked and appeared via Livestream from his residence in the Bahamas.
Per the host's introduction attendants and viewers could perceive SBF as either a young man who made terrible mistakes or a massive fraud.
Here is a detailed summary of the SBF points during the interview:
SBF claimed he made mistakes, he didn't do good work as CEO, he would give anything to do things all over again.
Defended his position that he never tried to commit fraud or defraud anyone.
He claimed he was deeply sorry for customers losing their funds.
FTX Int'l that is registered in the Bahamas is a different company from FTX US. The funds are there for FTX US users to be made whole.
He didn't know about Alameda co-mingling FTX funds nor did he do that knowingly. It was all a massive failure of oversight.
He says Caroline Ellison (Alameda CEO) did use FTX funds to cover leverage.
It was Alameda failures that transferred the risk to FTX.
Accounting errors are to blame for underreporting how big the hole was in Alameda positions.
He claims he wasn't running Alameda and they are separate entities, he wasn't involved in Alameda decision-making processes.
He was nervous when Alameda balance sheet was leaked out on November 2nd. He only knew there was really a problem on November 6 when the Tweet for FTT came out (CZ tweet) and a run on the bank started.
Claims during the hack or after he didn't have access to the system. Confirms there was a hack. Confirms US & Bahamas made moves to seize assets.
Doubles down that before he filed for Chapter 11 there was an interest in the value of billions for FTX.
Believes he was pushed to declare bankruptcy. If he hadn't filed for Chapter 11 he claimed he might have turned things around.
Think there is still a possibility to make clients whole like in the Bitfinex case.
The real estate and property bought by FTX was meant to facilitate and make it easier for developers and FTX / Alameda staff to move there.
There were no wild drug parties in the villas they were all staying together. He only got drugs under prescription and not for recreation.
His political donations were made to both sides of the aisle, though his Democratic party ones were more into media attention. The money for the donations came from profits.
Claims media donations were made to promote good and ethical journalism not to buy media influence and PR.
In fairness, I believe that Andrew Ross Sorkin did a good job at the interview. At points the questions were soft and he could have pushed harder. On the other hand SBF made a number of self-incriminating claims. US prosecutors could use excerpts from the interview in their case against SBF.
Last, what I found really distasteful, apart from SBF's obvious attempt to take the criminal blame away from him, was the audience. The latter was visibly amused, laughing at SBF remarks like that he "had a very bad month" and clapped him. They looked as if they were completely detached from reality.
In the end it is up to you to believe or not SBF claims.
I don't. No way this was all accounting, oversight, or risk management error. No way he didn't know what was happening with Alameda and that FTX & Alameda funds were co-mingled in breach of the Crypto Exchange's Costumer Terms of Service.
Great job listing the main points! So he'll be washing his hands, blaming Caroline and making jokes to make the audience laugh and saying how sorry he is... still not buying that.
Reminds me of that British Petroleum CEO saying over and over again how sorry he is. when the oil was already spilled.
It's easy to be sorry after the fact. It doesn't cost anything after all
Exactly, a tactic commonly used by celebrities and leaders
It made me think of South Park's parody of that BP appology!
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Yeah, me too! Sometimes when the CEO of BP was apologizing he was surrounded by cute dogs or baby seals or something... 😅
The points in 12-14 are interesting because it shows his mindset. He basically wishes that he could have kept the (alleged) ponzi scheme going longer and even has hope that this can be fixed and FTX could continue.
I wish Caroline Ellison would do an interview like this to tell her side of the story.
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Thanks for reading through it! Yes, much of the blame is being purposefully directed towards Caroline / Alameda. It would be interesting if she ever decides to speak her side of the story. Meanwhile, Trabucco who was co-CEO till the summer is totally off the radars
I'm not familiar with Trabucco, but I'll look into who he is. SBF also did another interview that aired this morning on the show Good Morning America:
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It looks like they are playing a well orchestrated pity-redemption arc. His lawyers or PR firm is probably behind it
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This has generated a whole controversy, mismanagement and fraudulent practices that FTX committed and that have done so much damage to the crypto market should not be endorsed.
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