SBF Doesn’t Know What Alameda Research Did to Customers’ Dollar Deposits

Key Takeaways:

  • SBF has no idea where $5 billion investor funds ended up after reaching Alameda.
  • The former FTX CEO did not confess to any wrongdoing except making "dumb mistakes."
  • Everything but "dumb" SBF did not inspire confidence with the New FTX CEO.
SBF Doesn’t Know What Alameda Research Did to Customers’ Dollar Deposits
crypto community watched collapse of the FTX exchange

YEREVAN (CoinChapter.com) – Since Nov 8, the crypto community has watched the spectacular collapse of the FTX exchange and its sister company Alameda Research.

The implosion caused investors to lose billions of dollars and sent the crypto prices into a freefall, shattering the frail stability n the digital asset market. However, the infamous FTX founder Sam Bankman-Fried has no clue where the billions went.

SBF Has “No Idea” About Investors’ Funds

In the latest interview with the Wall Street Journal, the former CEO appeared at a loss because investor money got caught up in a toss between FTX and Alameda.

The interviewer, Alexander Osipovich, asked SBF the most obvious question: How could an “obviously smart guy” like SBF have overlooked a $5 billion fund gap? Unfortunately, the answer was not “obviously smart.”

I ask that myself a lot. How I made a series of mistakes that don’t just seem dumb but seem like the kind of mistakes I would have ridiculed someone else for making.

commented SBF.

Moreover, Bankman-Fried appeared to be out of the loop on many key questions about his company and the assets he managed.

They were wired to Alameda, and…I can only speculate about what happened after that. Dollars are fungible with each other. And so it’s not like there’s this $1 bill over here that you can trace through from start to finish. What you get is more omnibus, pots of assets of various forms.

commented SBF.
Also read: When CME Group CEO Called SBF a “Fraud” and a “Clown”

He distanced himself from Alameda, saying he had stepped back from running the firm and had little insight into its workings. However, the executive owned 90% of it.

Moreover, Bankman-Fried’s assumptions suggested that FTX customer funds flowing into Alameda bank accounts could have been recorded in two places—as FTX customer funds and as part of Alameda’s trading positions.

If so, such double-counting could have meant a breach in the balance sheets of both FTX and Alameda. In other words, SBF claimed (knowingly or not) that the exchange had billions in assets that weren’t there.

During the interview, Bankman-Fried denied that unfortunate accounting affected FTX’s financials under his watch. However, he acknowledged that Alameda’s liabilities might not be fully on record.

New CEO Slams SBF

While the dewy-eyed confession from SBF never came, the new FTX CEO John J. Ray asserted that FTX’s financial reporting is untrustworthy.

“Never in my career have I seen such a complete failure of corporate controls and a complete absence of trustworthy financial information as occurred here,” the official commented.

Ray also cited compromised systems integrity and faulty regulatory oversight, among many issues. In addition, the CEO pointed out several problems, including “the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals.”

In the meantime, SBF continued to claim that he could not answer the most basic questions about his company’s asset management. For example, the phrase “off the top of my head” was thrown about during the interview.

Additionally, the CEO stated that he “could only speculate” about what happened to the investor funds after they reached Alameda.

Considering the irreparable damage to SBF’s reputation, investors are not likely to fall for his ‘innocence act.’ However, the Bahamas-located former CEO is not under investigation. A fact that raised many eyebrows in the crypto community.

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SBF, SBF Doesn’t Know What Alameda Research Did to Customers’ Dollar Deposits

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