FTX founder Sam Bankman-Fried granted a rare interview with independent crypto journalist Tiffany Fong. In the conversation, the elusive founder addressed a number of controversies that have surrounded him over the past few weeks, including commingling client funds, relations with Ukraine, donations to the Democratic party, and more.
“I’m not a journalist by profession,” Fong told The Epoch Times.
She explained that her introduction to reporting came after losing a “substantial” portion of her savings to the collapsed decentralized finance project Celsius in June, a topic she then began covering.
According to Fong, she was able to land the interview because Bankman-Fried had followed her on Twitter after being intrigued by her reporting on Celsius, which led to “a few brief but friendly exchanges” between the two. The recorded phone call, posted to Fong’s YouTube channel, touches on many of the headlines that have appeared across the spectrum of media since the story broke in early November.
“I donated about the same amount to both parties,” Bankman-Fried told Fong when asked about his political donations.
The crypto exchange founder’s political donations have been widely publicized in recent weeks, with numerous outlets reporting that Bankman-Fried personally donated almost $40 million to Democratic candidates ahead of the 2022 midterm elections, outdone only by Democrat mega-donor George Soros.
“All my Republican donations were dark,” he said, meaning that they weren’t disclosed publicly. “And the reason was not for regulatory reasons; it’s because reporters freak the [expletive] out if you donate to a Republican because they are all super liberal.
“I just didn’t want to have that fight so I made all the Republican ones dark.”
Bankman-Fried went on to add that general elections don’t matter to him nor to other top donors. According to him, the smart money is spent on primary candidates because those offer a more meaningful range of choices.
According to OpenSecrets data, only $235,000 of Bankman-Fried’s political contributions went to Republicans. However, his co-CEO, Ryan Salame, donated about $23 million to Republicans and conservative groups in 2022.
Relationship to Ukraine
“I wish I could’ve pulled that off,” Bankman-Fried joked, referencing a popular internet theory that FTX and Ukraine were colluding to launder humanitarian donations.
In March, FTX and Ukraine partnered to set up a donation platform to facilitate crypto payments to the National Bank of Ukraine.
This partnership catalyzed speculations, which obtained substantial reach, being covered by Fox News anchor Jesse Waters.
“Democrats send money to Ukraine, Ukraine sends money to FTX, and FTX sends money to the Democrats’ campaigns,” the anchor said in one of his nightly segments.
According to Bankman-Fried, this is all nonsense.
“I wish I was part of an international conspiracy that interesting,” he said.
Commingling FTX Client Funds
Toward the end of the interview, Fong pressed Bankman-Fried on the misuse of user funds. Various news organizations, including The Wall Street Journal, reported that Bankman-Fried’s crypto investment company Alameda Research had tapped into FTX customer funds to finance reckless trading ventures.
When asked how FTX funds ended up on Alameda’s balance sheet, he stuttered through a lengthy response and eventually answered that it ultimately came down to a “large margin position,” meaning that Alameda was making investments with loaned capital. Pressed to explain further, the former billionaire suggested that appropriating customer funds to margin accounts is “sort of the norm” for derivatives exchanges, implying that Alameda Research was simply fulfilling the role of a very large customer.
Then, referring to the general decline in crypto assets this year, Bankman-Fried noted that a “hyper-correlated crash” diminished the value of Alameda’s collateral and made it impossible to come up with sufficient funds to pay back the loans.
Appearing to contradict his claims that loaning customer funds is the norm, Bankman-Fried wrote in a now-deleted tweet, “We don’t invest client assets (even in Treasuries).” The tweet, posted in early November as the crisis was just beginning to unravel, also reassured customers that FTX had ample cash to repay all customers.
Bankman-Fried also briefly addressed the “back door,” which sources told Reuters he used to funnel FTX funds to Alameda. Despite founding several billion-dollar digital asset companies, he claimed that he barely knows how to code and wouldn’t be able to design such a complex tool.
The interview concluded with the former crypto magnate expressing remorse.
“My future is also not the thing that matters here,” he said. “What matters is the world’s future.”
Fong chuckled a bit and asked, “Is that like your media response, or is that how you really feel?”
Bankman-Fried responded, “No, it’s actually how I feel.”
The Epoch Times asked Fong whether she believed his remorse to be genuine. She admitted that she does but said it “doesn’t absolve him of wrongdoing.”
Bankman-Fried is scheduled to speak at The New York Times’ DealBook Summit, which began on Nov. 30. He’s expected to participate in the interview from the Bahamas.