🎧 Listen: In today’s episode of The Journal podcast, FTX founder and ex-CEO Sam Bankman-Fried talks with aosipovich about the crypto exchange’s collapse and how $8 billion of customer money went missing
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.Alexander Osipovich: So we're here to talk about what happened to FTX.
Kate Linebaugh: Welcome to The Journal, our show about money, business, and power. I'm Kate Linebaugh. It's Tuesday, December 6th. Coming up on the show, an interview with Sam Bankman-Fried. Alexander flew out to The Bahamas, where FTX was headquartered, to talk to Bankman-Fried. It wasn't their first time talking. You interviewed Sam Bankman-Fried a few months ago.
Sam Bankman-Fried: So at a high level, and I'll basically drill into it, but a high level, basically, Alameda Research had a margin position, a large one, open on FTX, and that position got hit a few times, and then got hit massively. That resulted in a position where the remaining assets were not able to generate nearly enough liquidity to be able to close down that position. And that's how, at a very high level, we got to where we are.
Kate Linebaugh: What Bankman-Fried described was a system where customer money would be used by Alameda without that customer's explicit knowledge.Alexander Osipovich: And it seems to be used in a kind of slush fund. Sam Bankman-Fried: I'd be happy to look. Well, sorry that was an instinctual response. I would've been happy to look into that. I don't have access to the systems to look into that right now. But I can try and go back and look into exactly what procedures happened for whether people ended up margin trading mode or not.
Kate Linebaugh: For the past year, Bankman-Fried said he hasn't been running Alameda. That's been the job of 28 year old Caroline Ellison, who was CEO of the firm and was at times romantically involved with Bankman-Fried. Sam Bankman-Fried: It's not at all what I'm trying to do. And look, I'm sure that there's plenty of blame for losses, for personal losses, to go around, but at the end of the day, FTX was a customer facing platform. And I was the CEO of FTX. And that means that it was my responsibility to protect the customers of FTX and it was my responsibility to do right by all of our stakeholders. And I clearly did not do a good job of that.
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