Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, can not hide his disgust at financial regulators.
The 30-year old former billionaire borrowed a whopping $1 billion from one of his bankrupt companies that he founded in 2019, but dismisses the role of regulators.
Now both he and and FTX and hedge fund Alameda Research are under criminal investigation by the Department of Justice and the U.S. Securities and Exchange Commission.
Although Bankman-Fried has been dubbed the “Bernie Madoff of crypto,” he continues to seek attention by tweeting his concerns about financial regulators and speaking to a reporter at Vox.
His attempts at controlling the narrative may only prove to give regulators more evidence as the company undergoes the bankruptcy process that was started when he filed for Chapter 11 protection on Nov. 11.
Bankman-Fried despises regulators, which his critics might find to be ironic.
He has sought supporters even though it appears that the money that hundreds of thousands of customers put into the platform are not likely to be recouped even though the company’s assets will be sold.
‘F..K Regulators’
Bankman-Fried sent several direct messages via Twitter to Kelsey Piper, a reporter at Vox, who had met him initially via Zoom during the summer when she wrote a profile about him.
Piper reached out to him via Twitter on Nov. 13 and he responded by taunting regulators by stating “Fuck regulators.”
He had never criticized them before unlike his main rival, Changpeng Zhao, the founder of Binance, who had attempted to salvage the company by acquiring it, but quickly backed out of the deal less than 24 hours later.
In another twist of irony, Bankman-Fried had spent time in Washington lobbying for more regulations for crytpo, which are digital assets that have gained market capitalization and attention from retail investors.
He also said he regretted making the decision to file for bankruptcy on Nov. 11 despite revelations of massive missteps at FTX and a lack of any oversight, including the misuse of customers’ money.
Bankman-Fried also wrote several tweets explaining his viewpoint and began by praising regulators, which appears to be an odd stance to take.
“Even so, there are regulators who have deeply impressed me with their knowledge and thoughtfulness,” he tweeted. “The CFTC has; the SCB, and VARA, too. And others, scattered. But most are overwhelmed.”
He starts off tweeting about how regulators have a challenging role. but quickly changes his tone.
“A few thoughts: a) It’s *really* hard to be a regulator,” he tweeted. “They have an impossible job: to regulate entire industries that grow faster than their mandate allows them to. And so often they end up mostly unable to police as well as they ideally would.”
FTX Was Valued at $32 Billion
FTX was once hailed as a major crypto exchange for both retail and institutional investors to buy and sell bitcoin, ethereum and various coins. It drew the attention of several sports stars such as Steph Curry and Tom Brady who made investments and money poured in from various venture capitalists such as SoftBank, Sequoia Capital, BlackRock and even Canada’s third largest pension fund, Ontario Teachers’ Pension Plan seeking to gain a profit from their investments. Instead, some of the investors such as Sequoia said they determined the value to be worth zero.
Valuations for FTX rose to a shocking $32 billion in February, but few people saw the red flags that have been revealed in the company’s bankruptcy filings by its new restructuring CEO John Ray, who was the liquidator of energy broker Enron.
The bankruptcy court filings have revealed that a software at FTX allowed management to hide the misuse of customers’ money.
“Unacceptable management practices included the use of an unsecured group email account as the root user to access confidential private keys and critically sensitive data for the FTX Group companies around the world,” the seasoned restructuring veteran blasted in a 30-page document filed with the U.S. Bankruptcy court for the District of Delaware.
Bankman-Fried, who served as CEO until this month, also used messaging apps that delete message automatically, which makes it impossible to find records about Bankman-Fried’s decisions.
“One of the most pervasive failures of the FTX.com business in particular is the absence of lasting records of decision-making. Mr. Bankman-Fried often communicated by using applications that were set to auto-delete after a short period of time, and encouraged employees to do the same,” Ray wrote.
Source: https://www.thestreet.com/investing/cryptocurrency/fallen-ftx-founder-bankman-fried-gives-regulators-the-middle-finger?puc=yahoo&cm_ven=YAHOO&yptr=yahoo