SORKIN: How would that happen?
BANKMAN-FRIED: There’ve been examples of this before in crypto history where this happened. Obviously, you can look at what happened with Bitfinex back a number of years ago where it got hacked and then ended up making over a few years’ period customers whole. There are a lot of assets that are on hand here, although many of them are not liquid. They were worth quite a bit more than the liabilities a month ago, even, let alone a year ago. There is at least a month ago there were or I guess, you know, three weeks ago, billions of dollars of potential funding opportunities. You know, I don’t know that it would have been great for my stake as a shareholder of FTX, but that’s not what matters here. And I think it would have brought more financing to customers. You saw obviously, you know, the Tron facility, which is open for a little while on FTX, which allowed some customers to get liquidity. And I, you know, you put some of these together. I, you know, there’s obviously equity in the business. Where does that lead? I don’t know exactly. And, and again, it’s not going to be my decision to make at the end of the day. But I, but I think there’s a shot for a real value.
SORKIN: We will have to wrap up. A few quick other questions. One, given what you know about compliance or the lack of it in this business, in this industry, I think there are a lot of people holding crypto today perhaps on exchanges like finance and other places, what should they think given what you do know and to the extent that you can tell us the truth about what you know?
BANKMAN-FRIED: What should they think? And I presume you’re asking what should they think about the safety of their assets going forward. Correct?
SORKIN: Yeah.
BANKMAN-FRIED: So look, I don’t, I obviously don’t know exactly what’s going on at other exchanges. I can tell you what I would think as a customer. You know, if I, if I were a customer here, which is look for the things that I wish FTX had been able to supply. Things like, you know, proof of reserves is helpful. Look for as rigorous of that as you can look for regulatory reporting. Right. You look at what the JFSA had in place in Japan, you look at what the FTX U.S. derivatives had with, you know, I saw frequent reporting to regulators of exactly what customer assets balances, liabilities, distributions are on.
SORKIN: What about the governance piece? The governance piece — one thing we have not talked about — you had no board. You had no C.F.O. That should have been a red flag frankly for all of us.
BANKMAN-FRIED: Interestingly, in some ways we had too many boards.
SORKIN: Oh goodness. Hopefully we can get him back in just a moment — thank you for indulging us. We are almost finished with this interview. Will we get him back? Hang tight for one second. Can we try to bring Sam back just to complete this interview? Thanks everybody for sticking with us. We will be back with Sam Bankman-Fried, I believe in just literally a moment as they connect the feed. Sam, thank you for coming back. We were in the middle of the conversation about no seat, no board, no C.F.O, and I think you said something that raised some eyebrows over here that you had too many boards.
BANKMAN-FRIED: There was a board of FTX Japan, there was a board of FTX U.S. derivatives, FTX Australia, FTX Singapore, FTX Europe. We had more than a dozen boards when you look at all of the entities put together. Many of these boards had regulatory functions. The problem to some extent was OK, sure, you have all these boards, but at the end of the day, when push comes to shove, who was the person in charge of the global or the border or the function that is in charge of customer risk management. There is a diffusion of responsibility to some extent. There needed to be, I think, a single or small set of entities, whether of boards, of people, of responsible parties that were sitting there saying, “I feel responsible for what happens on FTX.” We had audited financials from the FTX finances perspective. We had infrastructure, but from the customer risk and finances perspective, much less.
