Foreign. A lot of people look at you and see Bernie Madoff yeah I mean I don't think that's who I am at all. but I understand why they're saying that people lost money and people lost a lot of money. and I mean at the end of the day? Look, there's a question of what happened and why and who did what. Um, what caused the Meltdown and I think that is reads very differently Right when you when you look at the classic Bernie Madoff story, there was no real business there. The whole thing as I understand it I think was was just one one big Ponzi scheme right? Fgx that was a real business. He was at the top of the cryptocurrency world. Was it 30 year old billionaire? Sam Bankman Freed You just need FTX it's FTX It's a safe and easy way to get into Crypto. Yeah I don't think so. Super Bowl ads naming stadiums Steph Curry Gizelle Buncher. We did a lot of things to try to uh to try and bolster our reputation to try and you know, help our brand. But in the early morning hours of November 11th, it all came to an end when FTX filed for bankruptcy and Bankman Freed stepped down as CEO amid reports of FTX customer funds being used to pay Alameda research creditors. this confirmed by former Alameda CEO Carolyn Ellison during early November video meeting with employees Alameda the Crypto trading firm also founded by Bankman Freed ABC News reached out to Carolyn Ellison for comment but as not heard back. One of the reasons FDX went bankrupt is because FTX deposits yep were used to pay Alameda's creditors Carolyn Ellison said you knew about that. Is that true? You know the best I can tell uh Alameda did have a big position open on FTX um that position uh I think was you know, very over collateralized. A year ago there is a a total Market collapse and you know specifically, large correlated collapse in its assets. You know over the last month and to some extent over the last year that I you know threatened that position quite a bit and I think that's you know as best I understand a lot of what happened there I I am no cryptocurrency expert I'm no Finance actually but I don't think you answered my question I always ask you I'm no expert that FTX deposits were used to pay off Alameda creditors thank you uh I don't whoa did our Boy George Stephanopoulos stump Sam Bakeman freed I don't know if FTX deposits being used to pay off Alameda creditors are you I would Which predators are you referring to Carolyn Ellison said that you all knew that these funds were used were put into Alameda they were the funds owned by your depositors so I can't speak for who knew what you know. A lot of the customers on FTX did have you know borrowers either you know in dollars or Bitcoin or Euros But as you know the FTX terms of service, tell the people who signed up none of the digital Assets in your account are the property of or shall be or maybe loaned to FTX Trading. But you're saying that happen? My understanding is a few things happen. The first is there is a margin trading facility on FTX by which users can lend out funds by which other users borrow funds. And so there are explicit cases where there is, you know, marching Send where there is borrow lending. If the Alameda is borrowing the money that belongs to FDX depositors, that's a bright red line, isn't it? There are a lot of cases where that's actually explicitly part of the programs and that are happening here. It says that the digital assets may not be loaned to FTX Trading They can't be loaned out. It's like shit. Yeah, they couldn't be loaned out. Uh uh, very existed Aid lending facility the honest guys and and I think that's probably covered. Who knows in the terms of service, but they'd have to approve of that. They're saying they didn't approve of it here. They're saying you approved a bit If you rewind to, you know the beginning of FTX Um, where you know some customers were you know? uh I think in line with sort of existing relationships that that they've had at least in some cases wiring money straight to Alameda research in order to trade on FTX So you do know and you did know that FDX deposits were being funneled to Alameda So I was vaguely aware that that was how some virus were being sent in the first place. Um, didn't That set off alarm bells in your head. So there are a lot of people who are involved in that process and look I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there. I knew that legal was involved I knew that other groups at the company were involved that you know there were agreements drafted up, but you're ultimately responsible and ultimately absolutely like I Look, I should have been on top of this and I feel really, really bad and regretful that I wasn't and a lot of people got hurt and that that's on me. Here's what Mark Cuban has to say about that. Yep, he said if I were him I'd be afraid of going to jail for a long time at the end of the day. you know it's not my call, what happens and uh, the world will judge me as it will. Are you worried about going to jail? There are a lot of things that are you buddy worrying me right now. Um, and you know as best as possible. I'm trying to focus on what I can do going forward to be helpful and you know, let whatever you know Regulatory and legal processes are happening play out as I will I do want to move Yes, this is really a yes or no question yeah Carolyn Ellison says you knew that FTX funds were being funneled to Alameda Did you know that I knew that there is an open margin position there and that that involves no. but that's all that. I'm asking if she's in court and you're in court and she's under oath and you're under oath and you're asked, did you know that these funds were being funneled to Alamedia? What is your answer I Did not know that there is any improper uh, use of customer funds. You also took out a one billion dollars and what was that for that was generally for reinvesting in the company I was not for you know consumption I You know to my knowledge I have basically nothing left. Um, you know basically everything I had was invested in the business I expect I'm gonna have nothing at the end of this I ain't got a hundred thousand dollars left in my bank account last I checked and I I think I Have you know One credit card working with that right now earlier this summer you thought you had what 32 billion? probably 20 but uh, a whole lot more than I do now I Can't imagine what it feels like to go from 20 billion dollars to a hundred thousand dollars. Yeah, it's I Mean it's been a really, it's been a really humbling fall in in a lot of ways. How do you explain the failure? Was it an inattention? arrogance? Um, it's a good question. Is it unethical? Some part of it was just literal distraction I Really should have spent some time each day taking a step back and saying what are the most important things here, right? and like: how do I have oversight of those and make sure that I'm not losing track of those And frankly, I did a pretty incomplete job at that. I spent a lot less time looking at assets and looking at balances and positions because that's not where Revenue came from and so it I wasn't seen as a court business driver. Obviously it was a core risk and that was a huge mistake of mine. To not think more about that, you said one of your great talents in a podcast was managing risk. That's right. George I it's I think that there is something maybe even deeper wrong there, which was I wasn't even trying like I wasn't spending any time or effort trying to manage risk on FTX trying like and that that obviously that's a stunning station. What? That's a pretty stunning admission. Yeah, I mean it. I Don't know what to say. like what happened happened and like if I had been, if I had been spending an hour a day thinking about risk management on FTX I don't think that would have happened I think I I stopped working as hard for a bit you know I don't think you realize digging himself into I think I got a little cocky I made more than a little bit um and I think part of me like you know felt like um, like we made it Wild.