Sam Bankman-Fried says he 'misaccounted' $8 billion after FTX customers wired money to hedge fund Alameda and the cash was counted twice

Sam Bankman-Fried FTX founder crypto exchange
Sam Bankman-Fried co-founded the crypto exchange FTX in 2019.FTX
  • Sam Bankman-Fried showed a Bloomberg reporter a spreadsheet of company finances.

  • He said that problems were discovered after FTX and Alameda finances were added together.

  • The company, which had no accounting department, had double-counted $8 billion.

Sam Bankman-Fried says he "misaccounted" $8 billion after some FTX customer funds were mistakenly counted twice, Bloomberg reported.

The news outlet interviewed Bankman-Fried at his $30 million Bahamas penthouse after the collapse of FTX.

The former billionaire – who now says he's down to his last $100,000 – showed Bloomberg's Zeke Faux a spreadsheet of FTX and Alameda's accounts.

"I thought the downside was not nearly as high as it was," Bankman-Fried said. "I thought that there was the risk of a much smaller hole. I thought it was going to be manageable."

He then explained how the balance sheet combined FTX and Alameda finances, because the latter had defaulted on its debt by this point.

On one line labelled "What I *thought*," the spreadsheet listed $8.9 billion in debts but also more than enough to cover it with $27.6 billion worth of assets.

"It looks naively to me like, you know, there's still some significant liabilities out there, but, like, we should be able to cover it," Bankman-Fried said.

But he then revealed a glaring oversight – the actual numbers were down $8 billion.

When the Bloomberg reporter asked Bankman-Fried if he had "misplaced $8 billion," the FTX founder replied: "Misaccounted."

He said that some FTX customers sent money directly to Alameda's account because some banks were more willing to work with the hedge fund than the crypto exchange.

Then, FTX's internal accounting system counted this money twice by crediting it to both companies.

Court documents filed by John J. Ray III – the FTX CEO appointed to oversee its bankruptcy – revealed that the company didn't have an accounting department.

Ray, who also handled Enron's bankruptcy, said FTX is full of "inexperienced" executives and demonstrates a "complete failure of corporate controls."

Company expenses were approved by emojis on online chats, too. Staff perks included a $200 daily allowance for food delivery, and private planes to deliver Amazon packages from Miami to the Bahamas.

Read the original article on Business Insider