Dec 26th 2022

The disgraced billionaire Sam Bankman-Fried has said he wants to testify before Congress about what caused the collapse of the cryptocurrency exchange he founded – but first he wants to fully understand the chain of events and isn’t sure how long that might take.

Bankman-Fried’s pledge, made Sunday on Twitter, came after the US House financial services committee scheduled a 13 December hearing about the failure of FTX and invited him to participate.

“Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” Bankman-Fried tweeted. “I’m not sure that will happen by the 13th. But when it does, I will testify.”

Bankman-Fried’s case is of particular interest on Capitol Hill in part because he has acknowledged that he donated money in equally large amounts to both the Democratic and Republican parties.

FTX filed for bankruptcy protection in November after the failure of a possible merger with rival crypto exchange Binance. The move left investors and creditors facing billions of dollars in losses, and Bankman-Fried resigned as FTX’s chief executive officer.

He has since denied allegations of potential fraud in a series of media appearances as law enforcement authorities and regulators scrutinize him and FTX’s wreckage.

He told an audience at the New York Times DealBook summit on 30 November that he “screwed up”, “didn’t ever try to commit fraud” and was as “shocked” as the rest of the public by FTX’s collapse.

During that appearance, Bankman-Fried addressed questions about whether FTX customer funds were misappropriated and given to the hedge fund he founded, Alameda Research. Bankman-Fried – who had reportedly been in a relationship with the hedge fund’s CEO, Caroline Ellison – said he “didn’t knowingly commingle funds” with Alameda and was surprised by “the size of their position”.

He told ABC News in a separate interview that he also had been spending barely any time “trying to manage risk on FTX” and had “stopped working as hard for a bit” before the firm imploded.

“What matters here is all the customers and stakeholders [who] got hurt and to help them out,” Bankman-Fried said. “What happens to me is not the important part.”

For many observers, explanations given by Bankman-Fried over FTX’s collapse and its $8bn (£6bn) shortfall in assets haven’t been easy to make sense of. At one point he mused that “poor internal labeling” of accounts at FTX could have precipitated his company’s downfall.

His repeated public statements about FTX likely buck the legal advice he is receiving. The leading US law firm Paul, Weiss recently dropped Bankman-Fried as a client after attorneys for FTX accused him of interfering with the bankruptcy reorganization by his “incessant and disruptive tweeting”. Bankman-Fried acknowledged at the DealBook summit that his lawyers didn’t want him to speak at the conference.

Reuters contributed reporting

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