Former FTX CEO Sam Bankman-Fried, also known as SBF, has apologized to stock exchange employees in a letter explaining the collapse.
In a Nov. 22 letter reviewed by Cointelegraph, Bankman-Fried lays out the reasons behind FTX’s liquidity crisis and subsequent employee bankruptcy. He largely confirms the information reported by the media during the stock market collapse, citing the downturn in the crypto market as one of the factors that led to a reduction in the value of FTX’s collateral assets. The November run on the bank, according to the former CEO, helped bring the exchange’s collateral down to about $9 billion with $8 billion in liabilities.
“It was never my intention for this to happen,” says SBF. “I didn’t realize the full magnitude of the margin position, nor did I realize the magnitude of the risk of a hypercorrelated crash.”
Bankman-Fried describes his role in the calamity as an oversight failure, saying he should have been “more skeptical of large margin positions” and put more procedures in place to monitor and simulate crashes and runs at the bank. He says he intends to make amends with affected team members, but seems to regret the events that led to FTX’s bankruptcy:
“I believe FTX was a thriving, profitable, innovative business a month earlier. Which means that FTX still had value, and that value could have helped make everyone more whole. We could probably have raised significant amounts of money; potential interest in billions of dollars in funding came within about eight minutes of me signing the Chapter 11 filings.
“Maybe there is still a chance to save the company,” says SBF. “I believe there are billions of dollars of genuine interest from new investors that could go into making customers healthy. But I can’t promise you anything will happen because it’s not my choice.”
Related: Sam Bankman-Fried Notifies Investors: ‘We’ve Become Overconfident and Reckless,’ Claims $13 Billion Leverage
SBF resigned as CEO of FTX on November 11 in the same announcement in which the FTX Group filed for bankruptcy in the United States. Bankruptcy proceedings are underway in the Delaware County, but the legal team representing FTX’s debtors said on Nov. 22 that the exchange’s assets were still at risk from cyberattacks. An unknown actor removed 228,523 Ether (ETH) from FTX on November 11.