Bill Ackman and Kevin O'Leary defend Sam Bankman-Fried, saying they believe he didn't know about Alameda's bad bets

kevin o'leary
"Shark Tank" investor Kevin O'Leary."Shark Tank"/ABC
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  • Bill Ackman and Kevin O'Leary believe Sam Bankman-Fried's claims he hasn't tried to commit fraud.

  • The founder of FTX faces questions about potential misuse of client funds by sister firm Alameda.

  • "Call me crazy, but I think @sbf is telling the truth," Ackman said in a Wednesday tweet.

Sam Bankman-Fried has won over influential investors Bill Ackman and Kevin O'Leary, who say they believe the FTX founder when he says he was unaware of sister company Alameda Research's dodgy bets.

They tweeted their support for Bankman-Fried after the former cryptocurrency exchange boss defended himself against accusations of wrongdoing in a highly anticipated interview at the New York Times Dealbook Summit on Wednesday.

"Clearly I made a lot of mistakes. There are things I would give anything to be able to do over again. I did not ever try to commit fraud on anyone," he told Andrew Ross Sorkin.

Bankman-Fried maintained that the bombshell collapse of FTX was down to a wider crypto market crash, and that he hadn't knowingly mingled funds from the exchange with those of trading arm Alameda.

"Call me crazy, but I think @sbf is telling the truth," Ackman, the billionaire founder of hedge fund Pershing Square Capital Management, said in a tweet Wednesday.

"Shark Tank" investor O'Leary, an investor in FTX who is also a spokesperson for the exchange, responded with his own support for Bankman-Fried. He recently told Insider the 30-year-old founder is a "savant" when it comes to trading crypto.

"I lost millions as an investor in @FTX and got sandblasted as a paid spokesperson for the firm but after listening to that interview I'm in the @billAckman camp about the kid!" O'Leary said on Twitter.

US federal regulators are reportedly among authorities investigating FTX for potential mishandling of customer funds, as billions of dollars remain unaccounted for. A key question is whether those clients funds were used by Alameda to cover loans that were being recalled, after The Wall Street Journal reported its CEO told that to employees.

In the Dealbook interview, Bankman-Fried said he didn't knowingly commingle funds and that the situation arose from an accounting mistake.

"I think that there is a substantial discrepancy between what the financials were, what the auditing financials were, the true financials, what the exchange understood — all of that was consistent — versus what the dashboards that we had displayed for Alameda's account there, which substantially underdisplayed the size of that position," he said.

"That's one of the reasons that I was surprised when we dug into everything — at how big that position had become."

Bankman-Fried's conduct has come under the microscope after his once-$32 billion FTX empire imploded in November in the face of a liquidity crunch. Its shock collapse has fired fears of other crypto firms being pulled under in the fallout.

FTX and Alameda Research filed for Chapter 11 bankruptcy last month, and Bankman-Fried stepped down as CEO at the same time. His replacement, John J. Ray III, said in court filings that he had never in his career seen "such a complete failure of corporate controls and such a complete absence of trustworthy financial information" as occurred at the company.

Read the original article on Business Insider