Sam Bankman-Fried admits involvement in two of Alameda's largest uses of funds: spending $3B to buy out Binance's FTX stake and pouring $4B into venture capital

Exchange's former CEO says he was close to key decisions at nominally separate trading firm — Speaking from his bed in Nassau …

Financial Times 2022-12-05 Joshua Oliver

Context & Ripple Effects

The disclosure adds detail to questions about the boundary between FTX and Alameda. Earlier reporting said part of FTX’s 2021 fundraising was used to reimburse Bankman-Fried for the Binance stake buyout, making the source of that transaction a central issue.

It also gives a factual bridge between Bankman-Fried’s public account and the later SEC allegation that FTX customer funds were diverted to Alameda. The reported involvement spans both a strategic ownership transaction and Alameda’s venture investing.

First-order effects

Bankman-Fried is more directly associated with Alameda’s two major capital-allocation decisions despite the firms’ nominal separation.
FTX, Alameda and Binance face sharper scrutiny over the financing and governance behind Binance’s exit from FTX.

Second-order effects

The earlier account of FTX fundraising and reimbursement becomes more consequential because it connects a reported share sale to a decision Bankman-Fried now says he helped make.
The SEC’s later allegation of diverted customer funds gains a clearer governance context: decisions presented as Alameda activity involved FTX’s former chief executive.

Third-order effects

If similar links between exchange operators and affiliated trading firms are established, formal corporate separation will carry less weight than evidence of who directed capital allocation.
Crypto platforms may face a lasting governance test in which related-party funding, venture investing and ownership transactions are assessed together rather than as isolated business lines.

The trend: The FTX-Alameda episode is part of a broader shift toward judging crypto-market governance by operational control over affiliated entities, not their nominal independence.

Discussion

@repmaxinewaters Maxine Waters on x
.@SBF_FTX, we appreciate that you've been candid in your discussions about what happened at #FTX. Your willingness to talk to the public will help the company's customers, investors, and others. To that end, we would welcome your participation in our hearing on the 13th.
@sbf_ftx @sbf_ftx on x
Rep. Waters, and the House Committee on Financial Services: Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain. I'm not sure that will happen by the 13th. But when it does, I will testify. https:/…
@autismcapital @autismcapital on x
PLEASE CONFIRM: A user claims that they spotted Caroline Ellison at Ground Support Coffee on West Broad in SoHo Manhattan at 8:15 AM. This would mean she is not in Hong Kong and is in NY not in custody. https://twitter.com/...
@brian_armstrong Brian Armstrong on x
I don't care how messy your accounting is (or how rich you are) - you're definitely going to notice if you find an extra $8B to spend. Even the most gullible person should not believe Sam's claim that this was an accounting error.
@billackman Bill Ackman on x
I was in attendance at the @andrewrsorkin interview of @SBF_FTX and tweeted that I found SBF believable. Many have interpreted my tweet to mean that I am defending SBF or somehow supporting him. Nothing could be further from the truth.
@brian_armstrong Brian Armstrong on x
It's stolen customer money used in his hedge fund, plain and simple.
@autismcapital @autismcapital on x
A highly credible source claims that Caroline Ellison is currently being represented by WilmerHale, a well known DC insider law firm. Please verify.
@ivanthek @ivanthek on x
Some well-posed questions on critical FTX detail in this interview. What I didn't see asked was why the CEO of FTX permitted what seems like unlimited, *automatic* dollar-for-dollar effective lending of new FTX deposits to Alameda. Can't plead “It's Alameda, so I don't know.” htt…
@bryvkin Boris Ryvkin on x
Why is SBF still giving interviews? Why is he not already in an orange jumpsuit waiting to be arraigned on wire fraud, criminal conspiracy and similar charges? When is the indictment coming down?
@jbarro Josh Barro on x
Someone asked me “weren't there audited financials?” and yes that probably would have been ideal lol, but: https://www.documentcloud.org/ ... https://twitter.com/...
@aosipovich Alexander Osipovich on x
Yesterday I sat down with Sam Bankman-Fried and asked him a few questions. https://www.wsj.com/...
@warrendavidson Warren Davidson on x
Bernie Madoff's trial took a little more than seven months. We learned most of the details during the trial. Then he was given a 150-year sentence where he has lots of time to understand what happened. But... he was actually arrested, charged, and prosecuted. https://twitter.com/…
@adamsamson Adam Samson on x
Lots of interesting tidbits from @joshckoliver's 3am call with Sam Bankman-Fried. Incl an admission that the former billionaire was more involved in investment & financial decisions at Alameda than he has previously suggested -> https://www.ft.com/...
@wclementeiii Will Clemente on x
Bernie Madoff was in custody the day after he got caught — meanwhile, the CEO of Alameda is just chilling in SoHo getting a cup of coffee 2 weeks after blowing up gambling away FTX customer deposits. https://twitter.com/...
@billackman Bill Ackman on x
The @FTX_Official fiasco is, at a minimum, the most egregious, large-scale case of business gross negligence that I have observed in my career, and that conclusion is reinforced by SBF's recent public statements.
@tree_of_alpha @tree_of_alpha on x
People out there asking “how did Alameda lose $3b in 2021?” https://twitter.com/...
@interfluidity @interfluidity on x
there is a certain elegance, just as old-school financial piracy, in Binance receiving a substantial part of the funds that left a hole in its largest rival's balance sheet, then calling attention for all the world to the hole. https://twitter.com/...
@doombergt @doombergt on x
Looks like SBF's plan is to confess to so many crimes so often that they become “old news”
@smdiehl Stephen Diehl on x
Compare and contrast this interview with the WSJ with his congressional testimony about how safe and superior crypto exchange risk management is. He's lying in one of these interviews, and it looks like to congress. https://www.wsj.com/...
@bitfinexed @bitfinexed on x
Alameda's pitch deck was obviously a ponzi scam, exchanges and traders have sat on these documents for years. They knew SBF/Alameda was a fraud all along, but they kept their mouths shut. https://twitter.com/...
@chrismasterjohn Chris Masterjohn on x
A good way to know if an individual or institution is a fraudster themselves is if they defend SBF as making a “mistake.” Everyone who preaches this nonsense reveals themselves as at least a defender of if not an insider in his geopolitically weaponized money laundering ring. htt…
@birdyword Mike Bird on x
I think @aosipovich does a better job here than any interview of SBF I've seen so far of getting to the crunchy core of important questions. The replies are unsatisfactory, unbelievable really, but it moves us away from the flam we've had so far. https://www.wsj.com/...
@doubleeph @doubleeph on x
They typically block comments on articles where the matter is in court or the topic is race. But never seen them do it for a piece like this. Incredible
@lilmoonlambo @lilmoonlambo on x
SBF in every interview: https://twitter.com/...
@khalafroula Roula Khalaf on x
SBF admits closer involvement in financial decisions at Alameda than he has previously disclosed. FT Interview https://www.ft.com/...
@kadhim @kadhim on x
What did Alameda do with the money it got from FTX? Sam Bankman-Fried tells @joshckoliver at least some went into venture capital bets. Illiquid, long-term investments, funded by borrowing... https://www.ft.com/... https://twitter.com/...
@twobitidiot Ryan Selkis on x
Lies. Extradite him. https://twitter.com/...
@wallstcynic Diogenes on x
How is this not performance art at this point? https://twitter.com/...
@alistairmilne Alistair Milne on x
SBF sent this Alameda balance sheet to the media in August Note the lack of any USD (even mislabelled FTX users' USD! 🤡), and lack of any #Bitcoin or even ETH Literally all-in illiquid shitcoins to pamp his net worth on paper https://twitter.com/...
@theblock__ @theblock__ on x
Tomorrow, @SBF_FTX joins @fintechfrank on @TheScoopPod for a discussion on his collapsed empire, including: - Allegations of Alameda's special access to FTX - How regulators missed the FTX/Alameda connection - Why top executives received large personal loans Preview below 🔊👇 http…
@smtuffy Sean Tuffy on x
Every time SBF offers up one of these vague statements, the next question has to be “where's the money, Sam”
@jbarro Josh Barro on x
Can one really call an interview with SBF an “exclusive” at this point? https://www.wsj.com/...
@adamscochran Adam Cochran on x
Ngl if SBF goes down because his ex has flipped state's witness to save herself - that would be an even sweeter form of justice than him having been done in by investigators alone. Plus it's going to make the movie romance/betrayal subplot so much better!
@ldrogen Leigh Drogen on x
https://twitter.com/... One wonders whether that $3B that went to Binance gets clawed back given the money used to buy the FTX stake was fraudulently garnered https://twitter.com/...
@zerohedge @zerohedge on x
SBF is done: Jamie Gorelick works at Wilmer; she is the former No. 2 in the Clinton Justice Department and has said that Merrick Garland is her wingman. https://twitter.com/...
@tobi Tobi Lutke on x
Brian is right. https://twitter.com/...
@punk6529 @punk6529 on x
for some reason, this has been a difficult concept to understand for large swathes of the establishment https://twitter.com/...
@johnedeaton1 John E Deaton on x
Sam isn't just a fraud, liar and a thief. He is the embodiment of evil. On top of all that, he's a really bad actor. His claims of being remorseful and being “deeply sorry” are genuinely insincere. https://twitter.com/...
@adamscochran Adam Cochran on x
The worst part about Ackman, isn't his dumb takes that support SBF because he wants to ride the money train. It's that he doesn't even have the guts to stand by those takes when people call him out. He's deleted and walked back multiple tweets supporting SBF each time. https://tw…
@tomfitton Tom Fitton on x
FTX Founder Sam Bankman-Fried Says He Can't Account for Billions Sent to Alameda Entrepreneur says he had little insight into workings of trading firm even though he owned 90% of it https://www.wsj.com/... via @WSJ
@iamdcinvestor @iamdcinvestor on x
i consider myself a student of human nature what SBF has done in public appearances is throw the entire Alameda team under the bus, blaming them almost completely prosecutors likely already talking to those ex-employees will use this as leverage to get max info bad play by SBF
@mayazi @mayazi on x
The real question should be why Bill Ackman is suddenly vocal about crypto since the FTX collapse. He's been quietly happy investing in crypto without opining. https://twitter.com/...
@twobitidiot Ryan Selkis on x
If a crypto journalist received SBF's net worth calc like the geniuses at Forbes did in August, this case would have been cracked months sooner, and a ton of political damage could have been avoided. The second he claimed $13 billion in FTT & SRM net worth, it was over. https://t…
@byronyork Byron York on x
Where are the individual stories of FTX/Alameda victims? People who can recount specifically what they deposited and what experience they have had trying to recover their money? Element missing from much coverage... https://www.wsj.com/... https://twitter.com/...
@danprimack Dan Primack on x
The difference between talking to reporters and testifying under oath... This is an embarrassingly weak reply Sam. https://twitter.com/...
@basedkarbon @basedkarbon on x
So would I like to testify before congress? Sure I'd love to tell them everything that happened but FWIW I have no idea what happened and probably never knew what was happening to the best of my knowledge. Ummmm people don't **always** know what's happening but i hope to find out…
@coryklippsten @coryklippsten on x
Every time @nytimes or @cnbc refuse to challenge SBF's narrative that he wasn't actively involved in Alameda, they're perpetuating lies and covering for a criminal. https://twitter.com/...
@intocryptoverse Benjamin Cowen on x
RIP social risk https://twitter.com/...
@kadhim @kadhim on x
Our previous reporting on Alameda/FTX's sprawling venture capital portfolio — which is properly worth less in reality than on paper https://twitter.com/...
@nntaleb Nassim Nicholas Taleb on x
No, for Baal's sake, SBF did not “f***k up big”. He committed fraud. @FinancialTimes, can you get it? https://twitter.com/...
@brianstelter Brian Stelter on x
“Speaking from his bed in Nassau at around 3am on Saturday, Sam Bankman-Fried...” https://www.ft.com/...
@altcoindailyio @altcoindailyio on x
Sam Bankman-Fried (CEO of FTX) has been active this week doing interviews (seemingly w/ the goal) to put out a specific message: One idea SBF continues to claim is that he had little knowledge of Alameda. He continues to suggest it was at arms length. (1/3)
@doubleeph @doubleeph on x
Forget the article itself - it's just SBF telling ‘his side’ of the story - the weirdest thing here (and that's putting it mildly) is that the FT have not allowed comments on this article https://www.ft.com/...
@jimiuorio Jim Iuorio on x
Wait now....what's happening here exactly? We appreciate what? https://twitter.com/...
@thedragonfeeder Chris Fenton on x
“Mr. Bankman-Fried says it wasn't theft. “I ask myself a lot how I made a series of mistakes that seem—they don't just seem dumb,” he said. “They seem like the type of mistakes I could see myself having ridiculed someone else for having made."" Unreal! https://www.wsj.com/...
@cgasparino Charles Gasparino on x
Truth is better than fiction and often very funny https://twitter.com/...
@sdatika1 @sdatika1 on x
When SBF says “kind of”, it he knew... just didn't know how, well it's hard to count to $32B. And maybe someone should tell him, that it shouldn't had been not even $1!. https://www.ft.com/...
@zerohedge @zerohedge on x
FTX Founder Sam Bankman-Fried Says He Can't Account for Billions Sent to Alameda: WSJ Hey @SBF_FTX call your Dubai and Singapore banks, they'll account for it in 2 minutes
@caspiancey Cas Piancey on x
The SBF argument I've heard so far goes something like this: • first commit wire fraud • then commit bank fraud • then commingle customer, investor, and other funds (money laundering) • and lastly, embezzle I don't think this will hold up well for him in court.
@keubiko @keubiko on x
The treatment of this SBF dildo as anything other than a giant fraud and criminal is one of the most perplexing questions of 2022. https://twitter.com/...
@smtuffy Sean Tuffy on x
Here's the thing, Alameda bought out Binance with the FTT coin. So, where exactly did the $3 billion go? https://www.ft.com/... https://twitter.com/...
@mechmarkets @mechmarkets on x
This video is one of SBF's most damning interviews yet. His alibi now seems to be that instead of doing fraud, they were merely running a giant money laundering operation. https://twitter.com/...
@antoniogm Antonio García Martínez on x
If only we'd invented some way of easily creating financial accounts—let's call them ‘wallets’—as well as a publicly-visible ledger of transfers, so that both oversight and accounting would be easy and transparent. https://www.wsj.com/... https://twitter.com/...
@trungtphan Trung Phan on x
SBF media tour, explained https://twitter.com/...
@ericbalchunas Eric Balchunas on x
Good question by @fintechfrank, easily soliciting the longest and most tense pause yet from SBF (which is saying something bc there have been many long and tense pauses in his 'i'm so sorry let's find out who did this' media tour) https://twitter.com/...
@nkulw Noah Kulwin on x
Lawyers HATE this!! https://twitter.com/...
@ramahluwalia @ramahluwalia on x
1/ How do we explain FTX's $10 Bn in losses? Where did the $2 Bn in venture funds go? My working hypothesis is that FTX was a fraud even prior to recent events and as far back as 2021. #SBF will go down in history as a fraud larger than Bernie Madoff. 🧵
@jespow Jesse Powell on x
“It all added up if you counted negative balances as 100% recoverable” WTF!? No, dude. Borrowing 10,000 BTC from client balances vs FTT at “mark-to-market” is not just bad risk management. It is obfuscated fraud. The only diff between SBF & Madoff is Madoff didn't have a token.
@mleejr @mleejr on x
2022 SBF: Welcomed with open arms to an interview at NY Times DealBook Summit with a live audience laughing and applauding 2008 Bernie Madoff: https://twitter.com/...
@cgasparino Charles Gasparino on x
Great stuff here on why SBF could be worse than Madoff https://twitter.com/...
@tomselliott Tom Elliott on x
Ponzi schemer @SBF_FTX says he's not like Bernie Madoff because “FTX was a real business” https://twitter.com/...
@mrjasonchoi Jason Choi on x
The Master Plan > Create narrative for “criminal negligence, not fraud” > Bait high profile interviewers into spreading narrative > Divert attention to scapegoats (eg internal accounting, risk guys, trading team) > Avoid Madoff's 150 years in jail > Redemption arc
@mccannsportslaw Michael McCann on x
Smart piece by former federal prosecutor Ankush Khardori on why Sam Bankman-Fried—whose collapsed company, FTX, did business with famous athletes & teams—hasn't been arrested yet. Key point: SBF situation is more like Elizabeth Holmes than Bernie Madoff. https://nymag.com/...
@johnedeaton1 John E Deaton on x
I do not refer to @SBF_FTX as SBF. The most accurate, appropriate and just initials are “BMC” Bernie Madoff of Crypto
@zmanian Zaki on x
This is a great articulation of the best theory on FTX/Alameda https://twitter.com/...
@carnage4life @carnage4life on x
Bernie Madoff really spinning in his grave right now watching SBF, Do Kwon & Su Zhu giving interviews from exotic locations while he was arrested the next day.
@basche42 @basche42 on x
This is a great point Everyone calling this a conspiracy and thinking USG is just letting him walk because “they arrested Bernie madoff the next day” needs to remember this USG will lock SBF up for a long time but it will take a bit https://twitter.com/...
@nextdoorsv @nextdoorsv on x
tldr: Madoff confessed, causing the FBI to arrest him. SBF is doing the “oopise doodles!” playbook https://nymag.com/...
@cgasparino Charles Gasparino on x
Dan I love ya but you don't have to waste time reading this entire article to know that Madoff turned himself in; prosecutors here have to prove a case https://twitter.com/...
@danprimack Dan Primack on x
Twitter is full of conspiracies about why SBF hasn't been arrested. Very good explainer here, including why this is a much different case than was Madoff. https://nymag.com/...
@jamesfallows James Fallows on x
Late to this, but superb job as questioner by @GStephanopoulos. —Can't think of a more self-damaging interviewee than this guy SBF. (All the others would have lawyers holding then back.) —Resists Madoff comparison, but... —How did people ever take this guy seriously? https://twit…
@gerberkawasaki Ross Gerber on x
Why hasn't SBF been evicted from his FTX owned properties? Shouldn't his assets be sized for creditors ? Any one in the global police working on the biggest fraud since Madoff. Or more SBF interviews this week. #crypto
@lizsimmie Liz Simmie on x
‘At the risk of stating the obvious, the reason Madoff was arrested so quickly is because he confessed to every element of criminal fraud — including both the underlying scheme and his criminal intent’ https://nymag.com/...
@mrjasonchoi Jason Choi on x
The simplest and most obvious explanation for FTX I've read https://twitter.com/...
@neiljacobs Neil Jacobs on x
“Prosecutors at the DOJ cannot — and do not — simply indict people based on what they read in the press, no matter how damning it may seem...prosecutors have to conduct their own investigation to develop...admissible evidence of criminal misconduct...” 🎯 https://nymag.com/...
@fintechintern @fintechintern on x
Over the weekend @fintechfrank interviewed @SBF_FTX for two hours. Here's what they talked about: 1/3 https://twitter.com/...
@jgreco Jim Greco on x
Kudos to @fintechfrank for asking this. Gives away the game. FTX hid customer balances from auditors (the third tier ones) because @SBF_FTX was just stealing them. https://twitter.com/... https://twitter.com/...
@fintechintern @fintechintern on x
“Just yes or no — do you believe you deserve to be punished?” @fintechfrank x @SBF_FTX dropping tomorrow on @TheScoopPod https://twitter.com/...
@fintechfrank Frank Chaparro on x
NEW: 2-hour sit-down with Sam Bankman-Fried on the FTX scandal https://www.theblock.co/... https://twitter.com/...
@jchervinsky Jake Chervinsky on x
Excellent work by Frank. If you can stomach one more SBF interview, listen to this one 👏 This should end any speculation that SBF's press tour is a carefully planned strategy. He gives many incriminating answers and very few sympathetic ones. He's simply digging his own grave. ht…
@fintechintern @fintechintern on x
cont. 2/3 https://twitter.com/...
@du09btc @du09btc on x
The problem was always #Alameda: 1️⃣ User deposits #BTC to #FTX 2️⃣ Alameda borrows said BTC in exchange for #FTT 3️⃣ Alameda gambles and loses said BTC 4️⃣ FTT collateral is useless, #FTX is insolvent 5️⃣ Users withdrawals stop #FTX was a cash cow for Alameda, not an exchange.
@philgomes @philgomes on x
And why should they? This is just sad. I'm reminded of the stories of Gil Amelio going table-to-table in the Apple cafeteria bending employees' ears about how great he was for the company in the weeks/months after Steve Jobs returned. https://www.theblock.co/... @fintechfrank htt…
@caspiancey Cas Piancey on x
Sam is desperate to blame everything on Alameda Research while claiming he had no clue what was going on at Alameda Research. He was still in charge at FTX. He still allowed customer funds to be commingled and stolen. He is a fraud, a liar, and a manipulative a**hole.
@coinbureau @coinbureau on x
SBF has talked his arse off on Spaces, GMA, phone interviews, to MSM journalists etc, etc, yet now backing out of testifying before Congress. Could this be to do with the fact that lying to Congress is a crime? 🤔
@josharnoldoh Josh Arnold on x
Incredible that SBF still feels like his opinion should matter or that the people running FTX would care what he has to say as they clean up the destruction and chaos he created. https://twitter.com/...
@stephanie_murr Stephanie Murray on x
SBF blasted new CEO of FTX, saying John Ray & team “do not communicate” with him. Ray has said as much, telling employees SBF and his inner circle aren't involved with the company. Ray oversaw Enron bankruptcy and still said FTX is worst mess he's seen. https://www.theblock.co/..…
@alexisohanian @alexisohanian on x
One benefit to Cerebro is that having all of our firm's notes in one, structured place, u can quickly find gems like this (tagged @SBF_FTX) — from back in June. Now I need to build a /bet feature that lets anyone at 776 take a position on something based on new/jarring data. http…
@senatorshoshana @senatorshoshana on x
With SBF testifying before Congress I AM BEGGING YOU (whichever members he testifies before) to actually use it to fact-find and get him to admit to shit, as the man will not shut up
@davidzmorris David Z. Morris on x
@mdudas @SBF_FTX Wow he's really stepping it up. Not just the intense delusion of thinking he should still have any say, but the (probably made up) claims that the liquidators are lying. Insanely scandalous.
@mylesudland @mylesudland on x
“'Anything's possible,' Bankman-Fried said.” I'd say that about sums it up. https://www.theblock.co/...
@mylesudland @mylesudland on x
It's unclear if SBF has lawyers, but it is clear he has PR help. And the advice is to talk nonstop so your story cannot be simply summarized.
@teanataylor Teana Baker-Taylor on x
So far, the best #SBF interview to date. Finally someone who knows the right questions to ask, professionally, and follows up and pushes back on non-answers. I wasn't sure I could stomach yet another interview, but @fintechfrank did a really great job. https://podcasts.apple.com/…
@altcoingordon @altcoingordon on x
SBF when he gets a call from his lawyer https://twitter.com/...
@crypto_crib_ @crypto_crib_ on x
👀SBF takes aim at new FTX CEO, John Ray. “John Ray and his team do not communicate with me. They have not responded and he has not responded to a single message I've sent him,”
@smtuffy Sean Tuffy on x
Also, to be clear, taking FTX client money into an Alameda account and then claiming that money was part of Alameda's position on FTX is fucking fraud
@smtuffy Sean Tuffy on x
Anyway, SBF claims he took in $5 billion in actual client money that never left Alameda's books. So where did it go?
@mdudas Mike Dudas on x
Thank goodness, John Ray is completely icing our ⁦@SBF_FTX⁩ https://www.theblock.co/...
@degenspartan @degenspartan on x
the only interview that ive been anticipating tbh LETS SEE IF FRANK DELIVERS https://twitter.com/...
@timccopeland Cope on x
Frank grilled for SBF for 2 hours. Listen here: https://www.theblock.co/...
@smtuffy Sean Tuffy on x
I mean, c'mon https://www.theblock.co/... https://twitter.com/...

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