Yahoo Finance Live anchors discuss top takeaways from Sam Bankman-Fried’s first live speaking event.
- It was quite an interview, lasting more than an hour. And even though as the interviewer Andrew Ross Sorkin acknowledged, there was a lot of criticism for even going through with this interview for someone who may or may not be a criminal. And it seems that SBF, as you heard there, really has positioned himself as maybe naive, maybe having made mistakes, but perhaps not liable.
He said his lawyers definitely don't want him speaking out as much as he has been. And he spoke again to George Stephanopoulos on "Good Morning America" for this morning. But his credibility is not ironclad, to say the least. So in positioning himself as somebody who didn't know what was happening under his own roof, so to speak, it's may be difficult to believe.
- It makes you question who else might have been in the room with him on the other side of that camera because, at the same time, yeah, he does have parents who are very well versed and are lawyers themselves. And so it was clear that the strategy for himself was to try and make sure that he wasn't signaling that there was intent, which is one of the core pillars that has to be proven in order to deem somebody a criminal or having taken criminal activity.
And in this case, given the $10 billion figure that we heard tossed around multiple times in that conversation and so many people that were impacted that have lost money, one of those accounts coming up early in the conversation about somebody who had put their life savings of $2 million into FTX and had seen that wiped away, there is going to be even more conversation that goes forward with those individuals in mind, but also around proving whether or not there was criminal intent.
We know today that there's going to be the hearing, the December 1 hearing for the Senate Agriculture Committee. And that particularly is going to be titled Why Congress Needs to Act, Lessons Learned from the FTX Collapse. That's a larger question of if Congress knows the right steps to take in order to add some type of regulation and compliance necessary, even if there were other wrongdoings that FTX has already done in existing law that you've been bringing up time and time again.
- Right. Exactly. If, indeed, Alameda was using customer funds from the FTX exchange to fund its own activities, that was explicitly not something allowed even in the FTX disclosures that it made to its customers. So there's also the matter of the personal loans that were allegedly made from FTX or from FTX-related entities, personal loans to the executives at the company.
So there are still a lot of questions that are unanswered, that were not answered even in SBF's lengthy conversation. He brought up the idea that there was a big margin loan, in other words, a borrowed amount of money that was used to beef up a trade, so to speak, a margin loan that went bad. And that was part of what made things spiral out of control. But we still don't have as many details. He claims he doesn't have all the details either because, of course, he's not running FTX anymore.
We are seeing that during the bankruptcy proceeding it's now being run externally. But, again, who knows what he really does or doesn't know? In terms of the hearing that's going to be happening today with CFTC chairman Ralston Benham, who is the single witness that's going to be testifying at that hearing, yes, there are a lot of questions about disclosures, about what we can do to improve transparency for entities. But, of course, FTX operated offshore. So would it prevent that kind of arrangement? Again, there are still a lot of questions here.
- Right. And given that offshore alignment that they did have, there's a question about the difference between kind of FTX US and FTX International and customers of FTX US if they could actually get their funds back immediately or kind of, based on what Sam Bankman-Fried had said, I believe that withdrawals could be opened up today and everyone could be made whole from that. But nobody is going to be made whole. The crash has already happened. The wipeout has already taken place. And so now it's just a matter of, all right, when can people actually resume withdrawals, at least to get a sliver back, while class action lawsuits are also moving forward in tandem or in parallel right now?
- Yeah. Exactly. And FTX US filed for bankruptcy as well. So it's a little confusing his assertion that it's fine and people could get their money out. One more programming note for folks who are watching. You mentioned, of course, a lot of people have lost money here as a result of this. As fascinating and intriguing as it was to listen to SBF speak, we have to remember the other side of this, which is people have lost an enormous amount of money. One of those FTX customers is going to be on our 11:00 AM show today. So you want to make sure that you stay tuned for that because we always want to keep that part of the story in mind.