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SBF was interviewed by Andrew Ross Sorkin from the New York Times on Wednesday at the NYT DealBook Summit. During the interview, SBF insisted that FTX's collapse resulted from a market crash, and that he didn't commit a fraud.
When asked whether he "made a series of terrible decisions", or "committed a massive fraud", SBF answered, "clearly, I made a lot of mistakes or things I would give anything to be able to do over again. I didn't ever try to commit fraud on anyone. I was excited about the prospects of FTX a month ago. I saw it as a driving, growing business. I was shocked by what happened this month."
SBF said, "the US regulated platform with American users (FTX US), to my knowledge, that's fully solvent, that's fully funded. I believe that withdrawals could be opened up today and everyone could be made whole. None of these problems plague the US platform."
For FTX International, however, "Alameda Research did have a long position." SBF said, "what the safe is storing was the collateral from all of those positions. Alameda Research was one of those that put on positions there. And as I try and reconstruct this, over the last month, I have limited access to data, but my view of it, from what I have been able to see, is roughly that, basically a year ago, Alameda had, I think something like 10% leverage, had something like 10 times the assets of the position that it had on."
"Over the course of the last year, there were a number of market crashes that drove the value of those assets down, and leverage up. I think it was, to my knowledge, 2x leverage as of a month ago. You look at what happened this month, and you know, in a few days all out. It led to a total market collapse in a pretty short period of time, no liquidity. I think more than $10 billion wiped off in the matter of days, and realistically speaking, no ability for FTX to be able to to liquidate that position and generate everything that was owed."
When asked "was there commingling of funds", SBF said, "I didn't knowingly commingle funds. One piece of this (terms of service) is the margin trading. Customers borrowing from each other, Alameda is one of those. I was frankly surprised by how big Alameda's position was, which points to another failure of oversight on my part. And a failure to appoint someone to be chiefly in charge of that. But I wasn't trying to commingle funds."
In terms of his relationship with Alameda, "I wasn't running Alameda, I didn't know exactly what was going on. I didn't know the size of their position." SBF answered. "A lot of these are things that I've learned over the last month, that I learned as I was sort of frantically digging into this on November 6, November 7, November 8. And obviously, that that's a pretty big mistake. I mark that as a pretty big oversight that I wasn't more aware of. I was scared of, I was nervous because of the conflict of interest about being too involved. And obviously, that shouldn't have meant that I didn't have real oversight, or that they really shouldn't have meant that I failed to appoint anyone to be in charge of that oversight, that relationship. But I hadn't been running Alameda, I hadn't been thinking about its finances. I haven't been making those decisions."
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