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Sam Bankman-Fried says he ‘froze’ as FTX collapsed around him

 (Getty Images)
(Getty Images)

The former head of the collapsed cryptocurrency exchange FTX has apologised to employees and revealed new details about the firm’s multi-billion dollar downfall.

Sam Bankman-Fried stepped down as chief executive on 11 November, just before FTX filed for bankruptcy. Court proceedings began this week, with one attorney describing it as “one of the most abrupt and difficult collapses in the history of corporate America”.

In a letter sent to his former employees, Mr Bankman-Fried told them he was “deeply sorry about what happened” and admitted to not handling the situation well.

“I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again,” he wrote.

“You were my family. I’ve lost that, and our old home is an empty warehouse of monitors. When I turn around, there’s no one left to talk to.

“I froze up in the face of pressure and leaks and the Binance [attempt to acquire FTX] and said nothing.”

Mr Bankman-Fried also went into detail about the events leading up to FTX’s implosion, claiming that $60 billion in collatoral earlier this year was decimated by a crypto market downturn that left less than $10 billion in collateral by the start of November.

FTX’s financial position was further threatened by a bank run as customers rushed to withdraw their holdings from the exchange amid reports that the company had mismanaged funds on a massive scale.

As we frantically put everything together, it became clear that the position was larger than its display on admin/users, because of old fiat deposits before FTX had bank accounts,” he wrote.

“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.”

Mr Bankman-Fried gave no insight into the ongoing bankruptcy proceedings, nor did he offer an explanation as to why customer funds were sent from FTX to its sister company Alameda. However, he did express hope that customers would be reimbursed.

“Maybe there is still a chance to save the company,” he said.

“I believe that there are billions of dollars of genuine interest from new investors that could go to making customers whole. But I can’t promise you that anything will happen, because it’s not my choice.”

The exact amount owed to roughly 1 million FTX customers, though fillings recently revealed that more than $3 billion is owed to just the top 50 creditors.