FTX Founder Sam Bankman-Fried Apologizes to Ex-employees

Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, has published an open letter of apology to the company's former workers.

He admits responsibility for the firm's demise but insists the loss of $8 billion is the only cause of its downfall.

Salvage FTX

Based on The Guardian's report, Bankman-Fried wrote, "I deeply regret my oversight failure. In retrospect, I wish that we had done many many things differently ... I'm going to do what I can to make it up to you guys - and to the customers - even if that takes the rest of my life."

Despite the admission of guilt, the ex-CEO believed he could have salvaged the firm if he had not filed for bankruptcy in mid-November.

"Potential interest in billions of dollars of funding came in roughly eight minutes after I signed the chapter 11 docs. Between those funds, the billions of dollars of collateral the company still held, and the interest we'd received from other parties, I think that we probably could have returned large value to customers and saved the business," he explained.

In a last-ditch effort, intense and coordinated pressure came to declare bankruptcy for all of FTX, including solvent businesses, and despite accusations from other countries, the company complied.

Bankman-Fried said that although he knew better, he caved to the pressure and now regrets not listening to people who trusted in the platform's potential.

Firm's Potential

Bankman-Fried also claimed that FTX was a strong corporation with $60 billion in assets and $2 billion in liabilities as recently as this spring.

He added that since then, the platform's assets had lost value due to two collapses in the crypto markets, even while the number of users has increased. In November, its assets fell to $17 billion before "a run on the bank" led to $8 billion in withdrawals.

As per The Guardian's article, the last straw was finding out about an additional $8 billion in obligations due to previous fiat deposits before FTX had bank accounts.

The FTX founder told Kelsey Piper of Vox that these obligations had been disregarded for years.

Because the firm asked consumers to send monies to Alameda Research, billions of dollars were mismanaged.

Bankman-Fried said he never intended this to happen. "I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash."

Court Hearing

The former CEO ran FTX as his "personal fiefdom," a Delaware bankruptcy court heard Tuesday, Nov. 22.

Lawyers for the firm told the court that 8% of FTX's clients were in the UK, representing 80,000 unsecured creditors.

Most of these consumers are corporate clients and financial professionals utilizing the loosely regulated FTX International exchange to make leveraged bets on cryptocurrency prices.

After FTX's bankruptcy, online bank Starling suspended client deposits to cryptocurrency exchanges for seven months, citing consumer risk. The bank will reconsider the suspension in 2023.

This article is owned by Tech Times

Written by Trisha Kae Andrada