Sam Bankman-Fried, the founder of collapsed FTX Cryptocurrency exchange was arrested in the Bahamas.
He has been ‘on the run’ for weeks now.
Before this, he had said, he hopes to start a new business to make enough money to pay back victims of the FTX collapse. However, according to crypto history, that is a tall order.
The 30-year-old faces several federal investigations into his former company’s handling of funds.
Speaking in a luxury complex in the Bahamas, the former billionaire denies fraud but says he was “not nearly as competent as I thought I was”.
He admits worrying about possible arrest while “ruminating at night”.
The FTX crypto exchange allowed customers to trade normal money for cryptocurrencies like Bitcoin.
It was the second largest in the world, trading about $10bn of crypto coins every day.
But last month it was revealed that FTX and Mr Bankman-Fried’s separate company – Alameda Research – were financially unstable.
In just eight days everything came crashing down and bankruptcy was filed.
It is estimated that more than a million FTX users are locked out of their crypto wallets and cannot access their funds.
Mr Bankman-Fried invited the BBC to the residential complex in the Bahamas where he still lives and said he hopes to find a way to pay back FTX users.
“I’m going to be thinking about how we can help the world and if users haven’t gotten much back, I’m going to be thinking about what I can do for them. And I think at the very least I have a duty to FTX users to do right by them as best as I can,” he told me.
Asked if he planned to start a new business venture to earn the money to pay investors back, he said: “I would give anything to be able to do that. And I’m going to try if I can.”
Bankruptcy lawyers have described the FTX scandal as “one of the most abrupt and difficult collapses in the history of corporate America”.
They accuse Mr Bankman-Fried of running the company as “his own personal fiefdom”.
The US Senate Banking Committee wants the former CEO to testify at next week’s hearings into the collapsed exchange, and he said on Friday that he would attend.
At the top of a long list of alleged failings, there are allegations that Mr Bankman-Fried’s Alameda Research hedge fund was using FTX customers’ money to make risky financial bets.
A former senior FTX employee who worked with Mr Bankman-Fried has told the BBC he thinks the former CEO must have been aware that Alameda Research was using FTX customer funds.
He accused Mr Bankman-Fried of lying when he said in recent interviews that he did not know about the flows of cash and cryptocurrencies between the companies.
“No that’s not true,” Mr Bankman-Fried said, while going on to acknowledge that as CEO he was ultimately responsible for any mishandling of funds. “That’s on me, one way or another,” he said.
Asked whether he was fraudulent or incompetent, he replied: “I didn’t knowingly commit fraud, I don’t think I committed fraud, I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”
The American has conducted nine lengthy self-critical interviews in the last six days.
His team say they’ve had to relocate to an unknown location in the luxury resort where he lives, because of “security concerns”.
Reporters have taken pictures of him in his apartment with telescopic lenses from the sea, and at least two YouTubers have managed to sneak into the complex to film videos.
Mr Bankman-Fried, who comes from a wealthy family, claims to be concerned about his own personal finances with no access to his bank accounts and “less than $100K left”.
When asked if he is preparing for the possibility of arrest and prison, he said: “There’s some time at night ruminating, yes, but when I get up during the day, I try and focus, be as productive as I can and ignore things that are out of my control.”
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]
