Former FTX CEO Sam Bankman-Fried, also known as SBF, reiterated his apologies to exchange employees in a letter explaining the collapse.
In a Nov. 22 letter reviewed by Cointelegraph, Bankman-Fried details the reasons for FTX’s liquidity crunch and subsequent employee bankruptcy. He largely confirms media reports amid the stock market crash, citing the downturn in the crypto market as one of the factors leading to a reduction in the value of FTX’s collateral assets. November’s “race to the bank,” according to the former CEO, helped reduce the exchange’s collateral to around $9 billion with $8 billion in liabilities.
“I never wanted this to happen,” says SBF. “I didn’t realize the full extent of the margin position, nor the magnitude of the risk posed by a hyper-correlated crash.”
Bankman-Fried describes his role in the calamity as a failure of oversight, saying he should have been ‘more skeptical of large margin positions’ and had more procedures in place to monitor and simulate crashes and runs on the bank. He says he plans to “catch up” with the affected team members, but seems to regret the events that led to FTX’s bankruptcy:
“I believe a month ago, FTX was a thriving, profitable, and innovative business. Which means FTX still had value, and that value could have helped make everyone more whole. We probably could have raised significant funds; potential interest in billions of dollars in funding came about eight minutes after I signed the Chapter 11 documents.”
“Maybe there is still a chance to save the company,” says SBF. “I believe there are billions of dollars of real interest from new investors that could be used to make customers whole. But I can’t promise you that anything will happen, because it’s not my choice.
SBF resigned as CEO from FTX on November 11 in the same announcement in which FTX Group filed for bankruptcy in the United States. Bankruptcy court proceedings in the District of Delaware are ongoing, but the legal team representing FTX’s debtors said Nov. 22 that the assets of the exchange were still in danger of cyberattacks. An unknown actor withdrew 228,523 Ether (ETH) from FTX on November 11.