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Sam Bankman-Fried, founder and former CEO of the now-defunct cryptocurrency exchange FTX, tagged the decision to hand over the firm to a new leader during the bankruptcy saga his “single biggest mistake.” According to the former crypto executive, this move deterred him from saving the company from collapsing at the last minute.
In a recent interview with non-profit American magazine Mother Jones, Bankman-Fried shared insights into the days before and after the collapse of the $32-billion FTX exchange. According to the former executive, handing over the company to the current CEO John J. Ray III was his “single biggest mistake by far.”
SBF claimed in the interview that, minutes after putting pen to paper, he received a call about a potential external investment that could have saved the FTX exchange from the Chapter 11 debacle. However, it was too late to revoke his signature on the exchange to a new management when the offer came in, Bankman-Fried added.
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According to the interview, SBF and Ray were invited to the Congress by Rep. Maxine Waters (D-Calif.), then chair of the House Financial Services Committee, to testify in December 2022. While preparing his testimony for the hearing, the former FTX CEO received calls about his imminent arrest by the Bahamian police.
Bankman-Fried was subsequently extradited to the United States in January 2023, where he faced criminal charges related to customer funds misappropriation (about $8.9 billion) and collapse of FTX exchange. Now, the former FTX leader is currently serving a 25-year jail sentence, having been found guilty of seven felony charges.
The interview revealed that leading law firm Sullivan & Cromwell (S&C) had, through attorney Andrew Dietderich, proposed Ray’s hire as chief restructuring officer in case of bankruptcy proceedings to Bankman-Fried. SBF mentioned that “extremely large pressure” came from S&C and former staff members who were then working for FTX to hand over to a new management.
Interestingly, Ray filed for bankruptcy and hired Sullivan & Cromwell to oversee the process after he took control of the company. This move raised conflict of interest concerns, as many believed that the law firm had allegedly played a role in FTX’s mismanagement and eventual collapse through its representation in past legal issues.
