Sam Bankman-Fried, the disgraced former CEO and founder of FTX, has been spending recent days apologizing for his mismanagement of the firm on Twitter. Yesterday, an apparent email distributed by Bankman-Fried was shared on the internet, credited to Coindesk.
In the email, Bankman-Fried apologized once again for the disaster stating he would do anything to go back and rectify his profound errors. He added that he wanted to provide a better description of what exactly happened. Acknowledging that he has been cut from accessing actual data, Bankman-Fried attempted to outline the asset shortcomings following a “crash in the markets this spring that led to a roughly 50% reduction in the value of collateral.”
Bankman-Fried said in retrospect he would have done things differently, including the following:
- being substantially more skeptical of large margin positions
- examining stress test scenarios involving hyper-correlated crashes and simultaneous runs on the bank
- being more careful about the fiat processes on FTX
- having a continuous monitor of total deliverable assets, total customer positions, and other core metrics
- putting in more controls around margin management
Bankman-Fried does not mention the questionable relationship with Alameda Research – his hedgefund – that had borrowed customer money from FTX.
He does regret the bankruptcy filing claiming “roughly eight minutes” after he signed the bankruptcy documents, indications of interest of funding – billions- arrived.
In recent days, multiple individuals have claimed they saw red flags in the operation, warning others. It has also been revealed that federal investors had launched an inquiry into FTX months prior.
Some have labeled Bankman-Fried’s recent comments as delusional, alleging blatant acts of fraud. The lack of controls and incompetence has impacted multiple other crypto firms.
What is certain is that the failure of FTX has set back the digital asset industry for many years.