In a number of recent interviews, the former co-founder of FTX, Sam Bankman-Fried (SBF), explained that he “wasn’t running Alameda” and he “didn’t know the size of their position.” In a more recent discussion with The Block’s Frank Chaparro, SBF explained that auditors were looking at FTX’s corporate financials, but the auditors were “not looking at customer positions and not looking at customer risk.” This week, an FTX insider speaking to Bitcoin.com News under terms of anonymity shared a document that purportedly shows Alameda Research CEO Caroline Ellison’s personal account was in the hole by $1.31 billion in May 2022.
SBF Interviews Continue to Highlight a Massive Margin Position That Went Sour
There’s been a lot of information shared by the former FTX co-founder Sam Bankman-Fried (SBF) during his interviews, and it seems that somehow, without his knowledge, a large margin account got out of control. This has been blamed on “poorly-labeled accounting” practices and SBF said he “f***ed up.”
“In multiple ways, frankly. In terms of letting a margin position get too big, bigger than I thought it was. And not being thorough enough to catch that,” SBF told New York Magazine. The massive margin position, that took SBF off guard, has been referred to in many reports about FTX and during SBF interviews.
“We should not have allowed a margin position to get that big,” SBF stressed to New York Magazine reporter Jen Wieczner. “It was too big. And it was too big, given the liquidity of the collateral,” SBF added. In another statement, SBF detailed that Alameda’s margin position was so big that it “was not going to be closable in a liquid way in order to make good on its obligations.”
“That position, in retrospect, seems like it got substantially bigger in the middle of the year,” SBF added. The FTX co-founder continued:
That made it go from a somewhat risky position to a position that was way too big to be manageable during a liquidity crisis, and that it would be seriously endangering the ability to deliver customer funds.
During SBF’s most recent interview with The Block’s Frank Chaparro, the former FTX CEO said that regulators and auditors did not see any financial holes because customer positions, and Alameda Research’s positions, were not included in FTX’s financials. SBF said auditors looked at certain aspects, but they were “not looking at customer positions and not looking at customer…
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