FTX founder Sam Bankman-Fried explained how he sees the collapse of the crypto exchange.
Former crypto-exchange CEO Sam Bankman Fried said in a media interview that he had no more access to the crypto-exchange than a regular user, thus refuting rumors that have been circulating. At the same time, he admitted that he was mistaken about the involvement of the Alameda trading structure, which was part of the FTX ecosystem, in the operations of the crypto-exchange itself.
Speaking of the reason for the collapse. FTX, Fried stated that:
“It wasn’t the liquidity situation that caused the crypto-exchange to collapse. What caused this collapse was something else, something that put the crypto-exchange in a very uncomfortable situation, and the risk of which I underestimated.”
He said it could be described as “a very large correlation of different things during a series of changes in the free market, especially since it was caused by one of the market participants and when there were very large-scale moves to do so.”
He also said that he was disappointed in the legal team he had hired, believing that they had advised him of the wrong tactic to conduct himself by removing himself from releasing public explanations of what was going on.
Meanwhile, the collapse of FTX was one of the reasons a major cryptolending company, BlockFi, was forced Nov. 28 to take advantage of temporary protection from creditors’ claims under Chapter 11 of the U.S. Bankruptcy Code. FTX gave BlockFi a $400 million revolving line of credit in September, and BlockFi’s debt to FTX is now $275 million.