Sam Bankman-Fried admits FTX got ‘overconfident and careless’ ahead of collapse
Sam Bankman-Fried, CEO and Founder of FTX, walks near the U.S. Capitol, in Washington, D.C., September 15, 2022.
Graeme Sloan | Sipa via AP Images
Former FTX CEO Sam Bankman-Fried said on Wednesday that the cryptocurrency exchange got “overconfident” and “careless” as it grew into a $32 billion juggernaut.
“I was on the cover of every magazine, and FTX was the darling of Silicon Valley,” he wrote in a tweet Wednesday.
His comments come days after FTX filed for Chapter 11 bankruptcy protection at the end of a catastrophic week. The company spiraled into a liquidity crisis as customers demanded withdrawals and rival exchange Binance ripped up its nonbinding agreement to buy the company.
In a series of tweets on Wednesday, Bankman-Fried said “problems were brewing” that were “larger than [he] realized.” He said, to the best of his knowledge, he thought the exchange had built up around $5 billion of leverage, when in actuality, it had built that number was around $13 billion.
FTX may have more than 1 million creditors, according to an updated bankruptcy filing Tuesday, hinting at the huge impact of its collapse on crypto traders. Approximately 130 additional affiliated companies are part of the bankruptcy proceedings, including Alameda Research, Bankman-Fried’s crypto trading firm, and FTX’s U.S. subsidiary.
Bankman-Fried stepped down as CEO on Friday, and was succeeded by John J. Ray III, though the outgoing chief will stay on to assist with the transition.
The FTX founder said the company’s assets were “fine” two days before he was desperate for a rescue because of a liquidity crunch. He has since said in tweets that he’s trying to recover deposits for the company’s customers.
–CNBC’s MacKenzie Sigalos and Ari Levy contributed to this report.