Sam Bankman-Fried, the ex-billionaire CEO of crypto exchange FTX, prostrated himself before the Twitterverse on Thursday, apologizing profusely for the collapse of a $32 billion company that sent shock waves through the industry.
“I’m sorry. That's the biggest thing,” the 30-year-old wunderkind wrote in a 22-tweet thread. “I fucked up, and should have done better.”
Earlier this week, Bankman-Fried made the shocking announcement that he would be selling his company to rival Binance because of a “liquidity crunch.” A so-called “death spiral” had pulled the value of his company-issued token down 22 percent, and the company did not have the capital to back users’ investments. Bankman-Fried said the sale would stabilize the company and protect customers. But less than 30 hours later, Binance pulled out of the deal, declaring that the company’s problems were “beyond our control or ability to help.”
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So Bankman-Fried was back to Twitter Thursday, begging for forgiveness and explaining his next moves.
“Right now, my #1 priority—by far—is doing right by users,” he wrote. “And I'm going to do everything I can to do that. To take responsibility, and do what I can.”
He said FTX would spend the next week doing “everything we can to raise liquidity,” though he did not go into specifics and added that he “[couldn’t] make any promises about that.” He also promised that “every penny” of the money raised would go straight to users, “unless or until we've done right by them.”
He also explained where he thought he’d erred: a complicated issue involving underestimating his users’ margin and grappling with a sudden rush of withdrawals. He promised that any future iterations of FTX would operate with “radical transparency” and that stakeholders would be able to take a “hard look at FTX governance”—including asking for his resignation. He also announced that Alameda Research, his trading firm caught up in the week’s “death spiral,” would stop trading.
The former billionaire closed the thread with what appeared to be a bit of shade toward Changpeng Zhao, the founder of Binance.
“At some point I might have more to say about a particular sparring partner, so to speak,” he tweeted. “But you know, glass houses. So for now, all I'll say is: well played; you won.”
Bankman-Fried lost approximately 94 percent of an approximately $15 billion fortune following the collapse of his company, according to Bloomberg. Most of FTX’s legal and compliance teams reportedly quit that day.
Late Thursday, the FTX Future Fund team, the company’s philanthropic arm, announced that they would be resigning as a collective, with the collapse having raised “fundamental questions about the legitimacy and integrity of the business operations” behind the scenes.
“We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor,” the team said in a statement. “We are so sorry that it has come to this. We are no longer employed by the Future Fund, but, in our personal capacities, we are exploring ways to help with this awful situation.”
The spectacular meltdown of the company—the third-largest crypto exchange in the world—stunned the industry, leaving enthusiasts speechless. Experts previously told The Daily Beast the failure could have ripple effects through the entire crypto economy, scaring off potential users and spurring crackdowns from regulators.
“This episode highlights the vulnerability of the entire crypto edifice to swings in investor confidence,” said Eswar Prasad, an economics professor at Cornell University.
“Even large and apparently financially solid institutions turn out to have wobbly foundations that crumble at the least hint of trouble.”
