Sam Bankman-Fried, founder and former CEO of FTX, stated to the Wall Street Journal in an interview posted on Saturday evening that he “can only speculate” about what occurred in the past to billions of dollars after FTX customers transferred them to its sibling trading firm Alameda Research.
As Bankman-Fried put it:
“Outside of that the answer is, they were wired to Alameda — I can only speculate about what happened after that.”
Bankman-Fried told Alexander Osipovich of the Wall Street Journal that the cryptocurrency exchange only allowed users to link cryptocurrency wallets, rather than bank accounts, for the onboarding of fiat currency in 2019 and 2020, which led to the emergence of these accounting concerns.
He reckons that more than $5 billion, or more than half of Alameda’s overall position, came from customers transferring money to the company’s bank accounts.
When pressed for further clarification, Bankman-Fried responded:
“I can now go back and take a guess at…where they were ultimately spent, or used, or something.”
He said that “dollars are fungible with each other, so it’s not like this one dollar bill over here that you can trace through from start to finish. What you get is more just omnibus pots of assets at various forms.”
When Osipovich questioned Bankman-Fried about his seeming ignorance of Alameda’s goings-on, Bankman-Fried explained that he was too preoccupied with FTX and was wary of getting too deeply involved with Alameda owing to potential conflicts of interest.
FTX Founder Is Under Regulatory Crosshairs
The FTX is under many investigations followed by the demise. The United States House Financial Services Committee has stated that it would hold a hearing into FTX’s handling of customer cash and its financial relationship with entities like Alameda beginning on December 13.
Another Reuters report claims that in the previous two years, Sam Bankman Fried’s parents and the company’s top employees have spent about $121 million on at least 19 residences.