Discredited FTX founder Sam Bankman-Fried has pledged to testify before Congress about his cryptocurrency platform’s meltdown – at the same time as the highest lawyer to the late Ponzi scheme mastermind Bernie Madoff advised him to maintain his mouth shut.
Bankman-Fried’s vow to seem on Capitol Hill got here because the 30-year-old ex-billionaire embarks on a media apology tour – during which he has attempted to distance himself from the scandal at the same time as billions are still owed to investors. Rep. Maxine Waters (D-Calif.) had called on the previous FTX CEO to testify on Dec. 13.
“Once I actually have finished learning and reviewing what happened, I might feel prefer it was my duty to seem before the committee and explain,” Bankman-Fried tweeted on Sunday. “I’m undecided that can occur by the thirteenth. But when it does, I’ll testify.”
Despite a looming legal crackdown and scathing public criticism, Bankman-Fried has given interviews with the Recent York Times, Bloomberg, ABC’s “Good Morning America” and other outlets in recent days.
While appearing on the Recent York Times’ DealBook summit, Bankman-Fried admitted that he was chatting with the media against the recommendation of his legal team.
Ira Sorkin, a lead defense attorney for the disgraced Madoff, said Bankman-Fried is making a mistake by being so outspoken within the press.
“That’s the primary order of business: don’t talk,” Sorkin told Bloomberg on Friday. “You’re not going to sway the general public. The one those that are going to take heed to what you could have to say are regulators and prosecutors.”
“Sometimes clients consider they’re smarter than their lawyers. This guy is 30 years old, and he shouldn’t be smarter than his lawyers,” Sorkin added. “They ought to be telling him every five minutes to shut up, but sometimes clients don’t listen.”
Based on Bloomberg, legal experts have proposed that Bankman-Fried “may simply be testing out an it-was-all-a-big-mistake defense” to elucidate what went improper at FTX.
Reuters reported that Bankman-Fried secretly transferred $10 billion in FTX client funds to cover losses at Alameda Research, a sister cryptocurrency trading firm he also owned. Not less than $1 billion of those client funds remains to be missing.
Bankman-Fried has drawn sharp scrutiny over his public remarks since FTX imploded.
Within the last week alone, Bankman-Fried bizarrely claimed to have “misaccounted” a whopping $8 billion in FTX funds just before the cryptocurrency platform’s meltdown – telling Bloomberg he was “real lazy about this mental math” regarding FTX’s balance sheet.
Bankman-Fried also dodged an issue about potentially facing jail time while chatting with “Good Morning America” – and dismissed comparisons between his own mishandling of FTX client funds and Madoff’s infamous scheme to bilk investors.
“Whenever you take a look at the classic Bernie Madoff story, there was no real business there,” Bankman-Fried said. “The entire thing, as I understand it, I feel, was one big Ponzi scheme. FTX, that was an actual business.”
