NY Times’ Interview With Sam Bankman-Fried

SBF: In Alameda’s case, I don’t think I was marking them the way I wish I had from a risk perspective. And I want to sort of differentiate your, like, expected value or, or sort of, like, worth or something like that from security. And, you know, I think that I don’t have any strong statements to make about, you know, what value they’re assigned from sort of, like, an upside perspective or even a median case perspective. But clearly, I was, I was not nearly cautious enough from a downside perspective – from the extreme downside perspective. And, you know, I can tell you, in my head, I was looking at a 30% down move over a few-day period as a sort of, like, extreme tail-case event that, you know, we had seen once before, and, and then, you know, what happened here was, I mean, a 95% down move over the course of a year, and a, you know, 60% down move over a few-day period with very little liquidity and all happening at once in all of these coins in a correlated fashion in which hedges didn’t mean as much also because this was a specific crash on assets associated with Alameda Research, rather than all assets. And so even correlated hedges had limited use there, and a run on the bank at the same time. And all that are things, in retrospect, I should have expected might happen in an extreme scenario, because that’s how markets work. And, you know, we’ve seen other examples of that in history where, when things get really bad, they get really bad for all the relevant things at once, in a very direct and correlated and quick way.