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Sam Bankman-Fried admits that he was “not 100 percent sure” what was going on with the FTX money.

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Key facts:
  • Despite his role as CEO, SBF said he “did not know what was going on” with cash flows.

  • A space on Twitter served as a venue for the community to interview the former FTX CEO.

Sam Bankman-Fried (SBF), former CEO of FTX, the disgraced stock exchange, admitted that he was not entirely sure what happened to FTX’s money and its clients while he was CEO. He also claimed that Alameda Research used FTX’s clients’ money, although he later apologized and said he was “not 100 percent sure.”

In a Twitter space held Dec. 1 by investor Mario Nawfal, founder of IBC Group, SBF stood up for the community to try to answer their questions about the FTX bankruptcy and his position as CEO during the collapse.

From the beginning, the questions were quite incisive, questioning whether the Former CEO was aware of the movements of FTX funds.. Bankman-Fried remained evasive in the face of questions, claiming that he “didn’t know enough facts,” “didn’t know what was going on,” or “didn’t remember” some situations. SBF said he was with his legal advisers, who would assist him in giving this interview.

Chet Long, co-founder with Nawfal of the IBC Group, was one of the most incisive on how much SBF knew about the moves between FTX and Alameda Research, a company founded by Bankman and serving as FTX’s investment hand.

In one of the questions, Long asked whether SBF was aware of FTX’s funds, which came primarily from its users, were used by Alameda Research. As explained by Long, Alameda used about 50 percent of all FTX capital in investments and asked SBF if it was aware of this situation. The former CEO merely commented that “it may have been what happened” that caused FTX’s bankruptcy, but that he was “not 100% sure” because Alameda was supposedly an independent subsidiary.

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Long also questioned SBF on the issue of “legal liability with customer money” by asking Sam Bankman-Fried if he was aware that there was a legal commitment, written into the terms and conditions, that the exchange would could not use customer money. Sam merely commented that the terms and conditions had been “overwritten,” suggesting to guests that this “legal responsibility” no longer existed.

Sam Bankman-Fried did not know where the funds were allocated.

During the interview, which slowly turned into an interrogation, SBF explained that the situation of having no funds to draw down was due to leverage.. One of the participants, Ran Neuner, asked that while this was happening in the derivatives section, what was happening with spot funds.

Spot trading refers to spot trading, that is, the sale of one asset and the immediate receipt of another, as a form of payment. Unlike futures trading, which is executed through contracts and paid at the close of the contract.

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In the spot market, funds, according to market logic, should be 100 percent liquid since they are spot transactions. SBF commented that he does not know what is going on, trying to explain that leverage contributed to the fall of FTX. But then he contradicted himself by admitting it, Alameda Research’s use of client money. and falling market prices, were the “possible” causes.

Sam commented that although he is not at the helm as CEO of FTX, he wants to continue to contribute to the “ecosystem.” He also said that “hopefully” FTX will continue to find investments to repay FTX’s creditors. He provided no further information on what will happen to the funds of the affected individuals, whose case is already before the U.S. courts under a bankruptcy order.

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