SBF's Interview on TwitterSpaces (Only his words)

The Death of Decentralization

I mean I think at the end of the day like I feel like, you guys all deserve to hear from me about what happened and I want to be able to to say it.

Mario Nawfal @MarioNawfal

🚨SBF Joins the Show. Set your reminders 🫡 https://t.co/1m4urdSs4C

Can you hear me now? Yeah, I think, you know, at the end of the day, like, it's, you know, I feel like you all deserve to hear from me about what happened. I feel incredibly bad about it and I feel like. I mean to some extent I think that there was. I mean, there was a pretty big diffusion of responsibility and I mean, I feel. I feel incredibly bad about what happened. I feel bad about everything and I think that…

So yeah. And I think like at the end of the day look I was I was ceo of ftx and like that means that one way or another like what happens is my responsibility and. and you know, i'm. I'm the one person who doesn't get to say that whatever that wasn't sort of like you know, that wasn't in my realm. That wasn't something that I was chiefly responsible for. That's something that other people were thinking about. Like I i shouldn't get to say that.

And I did massively screw up in I i wasn't on top of shit. I wasn't on top of some of the most important things that I should have been. That's that's on me and you know i. I don't think, I think no one was really on top of, you know, international position risk risk management and i, you know, a lot of people could have been, but I was the person who should have been responsible for making sure that someone was. I haven't really been involved in alameda for a number of years and I and I get like you know periodic high level you know summaries from them on some of what was going on. But I haven't been making trading decisions there. I have been making day-to-day decisions there.

You know I hadn't been paying much attention to it and and and part of the reason that I had been paying so little attention to it was out of you know frankly out of a concern about about conflicts of interest. deeply. I mean, look, I i fucked up big, but i'm pretty offended by some parts of that, like. ain't trying. I had been together for a while. I don't control her. I never did. I think it's really fucked that you would say that I would. That that that's how things work. you know, putting that aside for a second like. I wasn't super involved in alameda. I was not involved at all in the trading. I hadn't been for years.

I was intentionally not getting involved in it because I was concerned about a conflict for interest. But you know, as to. you know, like I i I guess i'm not entirely sure what the question was. There's there's sort of a. so ftx, it's a margin trading platform, it's a derivatives platform. So like everyone was depositing collateral, you know, putting on positions, long positions, short positions, positions, you know, futures positions, burrows, you know the, the, the, the collateral that ftx held was equal to the sum of those customer positions.

But there are both positive and negative numbers there and so you know. so, well, what it means is that if you as a customer, you know, if you deposit $ and then, you know, withdraw one one thousandth of of a bitcoin. from the exchange or you know use that to sell bitcoin or something like that, you've put on a merchant position there or or you know or to do it with the the coin futures position and you know, you like you know many of the customers had negative balances in in assets. That's sort of how the platform functioned. I and the court. the way that, I mean the the way it worked again everyone had deposited collateral and people were borrowing and lending from each other on the platform those assets and withdrawing them. But it should have been the case that you know we could have liquidated any of those positions that we could have margin called them and sold them off to regenerate whatever they were short. so it was always the case this if you include the the negative positions of that that you have positives and you have. yeah, yeah.

Sorry so. yeah, sorry, uh, yeah. It's not a connection thing. It's when my phone gets a notification that it cuts out for a second. alright, give me a second. cool. Sorry, that's a good idea. Alright, it's in, do you not? well that it was always the case that you know, the customer balance is you know were equal to the the assets as long as you count the negatives as well as the positives that if you you know add up all of the customer balances positive and negative, but those were equal you know to the assets that that fx had. The problem is that there are both positives and negatives there which is the nature of margin trading, but it should have been the case. that at the end of the day we could have margin called any of those accounts and been able to to liquidate them in time. that, that, that is correct. That is correct. well, it never stopped being the case. it never stopped being the case in the context of the fact that there were both positive and negative balances on the exchange and that if you added all of those up, it added up to the same set of assets. But because they're negative balances, because there are people with borrowers, there are people who are short. 

That meant that the total amount of assets was not the same as the gross sum of all of the long positions put together. Which meant that in order to be able to allow, you know, everyone to withdraw all assets from the venue, you would have to settle all contracts and close down all open positions and all open margin positions that anyone had. That's the nature of a merchant training exchange. But you know to the that that second point. there's obviously a really big failure there of risk management and that's on me. so i'm not sure what you mean by compliance in context there, but. I i sure. So, I mean, I think that like I first of all, I absolutely could have and deeply wished that I had.

I paid a lot more attention to risk management. Like that was a deep failing and it was a really embarrassing mistake for me to have made. And I think it was a result in part of me getting a bit less grounded and of of, you know, me starting to get distracted from all of the details of the company. There are still some eyes paying a lot of attention to, but not as many as could have been. And you know, I was paying too much attention to. higher level things to long term strategic goals rather than, you know, spending as much energy as they should have, as I absolutely should have on data, but. I think that's not actually how a derivatives exchange works. On a derivatives exchange like and you can look at the clawbacks that a lot of exchanges had back in, the really frequent clawbacks.

And the core problem that was going on there was in order for, you know, everyone to be able to realize what they think they have, you need to be able to close down all positions on the venue such that no accounts end up net negative. So you need to be able to take every single account, in theory and all marginal futures positions such that there are no negative numbers or positions or balances anywhere and do that and and if you have a long position if if some user has a long position on the exchange and markets start crashing. 

At some point, that position is going to be underwater, and at the point where that position is underwater, that means you aren't going to be able to close it down while still leaving that account with a positive balance. It'll have a negative balance. so that was one piece of the terms of service, but there are many pieces of the terms of service concerning are there other parts of the exchange including the? so the terms parts of the terms of service are overridden by other parts of the terms of service. Well, it was the case that I don't know if that was part of the I don't know exactly which part you're going up. 

If you imagine any futures position that a customer had on on the platform. that is a situation where in order for, you know one side that has a position on to be able to be made whole. it has to be the case that the other side is able to close down their position that those you know mark to market gains that they have are conditional and that they're cred with on the platform are conditional on you know, us being able to liquidate the other side of that futures contract without that account going under. The same is true of all spot margin positions on the platform and that you know was spelled out in the terms of service if you read the full terms of service and so. there's that piece of it. There's a lot of other things going on as well. And so I i don't want to say that that was the only thing that went wrong. It wasn't.

There were, but all users were to some extent allowed to remove assets from ft x in that you know they could deposit funds to ft x, they could withdraw and they could even withdraw more than they had of some assets as long as it was over collateralized by other assets. So that piece was in theory not specific to to to to one firm and was you know rather a a feature of how the platform. worked that I that that's how margin trading works. It's it's you know how I collateralized but not fully funded positions work on platforms. That being said. obviously, like something really bad happened and that something was that that position got way too big. And you know, I vastly underestimated the scale of what a market crash could look like there. I mean, there's a definitional issue given what you think of the chapter process. I i was a large owner of it prior to that. so I totally hear you on that. There were billions of dollars in the barrel lending book.

On top of that there are billions of dollars of open interest on futures contracts, which is another place where in order for that to be able to settle successfully, it needs to be the case that I that you have. you know, you basically need to have you know ever and be able to be liquidated there in time. and so that's another source where this came from. There were some amount of lines of cr given to some firms on the venue and then there were some other effects on top of that that when stacked together created a position that was larger than it should have been, larger than I thought it was, larger than I should have allowed it to become and and represented a real failure of oversight and management. ohh, they did have collateral on ftx unfortunately and I say unfortunately but this was a huge mistake of mine as well because I should have anticipated you know the prospect of this and should not have allowed things.

But well it decreased quite a bit in value and so you look at it decreased by I think some you know many billions of dollars in value over a two day period starting on on november. yeah. Everything you said there is correct. And it was absolutely a failure of counterparty management. It was a failure of oversight of the account. It was a failure of management responsibility and it was a failure of understanding or even frankly thinking that hard about what a real downside scenario there would would look like. Because you know what he says. Yeah. i'm gonna answer the question is if there weren't a few of those words in it, but i, you know, basically, and I should cash out this by saying that I unfortunately don't have access to most of the data right now.

I've, you know, lost access to a number of the systems. And so because of that this is all piercing together, you know, from my recollection, from the, you know, pieces of data I have been able to find from the analysis I did in the days shortly after the crash. so these are all going to be approximate answers and and I apologize for that, I don't I don't have the exact ones but but the. yes, that's right. So yep. So yeah, so what happened there was the following and I think there are some tweets you know about this that that serves reference this fact you scroll back to to when ftx was first founded and at that time we were trying to get bank accounts for ftx.

We we couldn't, we eventually did you know a few years later. but you know - we couldn't get bank accounts that could take customer deposits for for ftx. We obviously were operating crypto wallets and you know I had crypto deposits and withdrawals. But some customers you know generally once that had in many cases sort of like I pursuing relationships otc with alameda, would I wire money to I to alameda research asking to be cred. to their fts account and they they wire it straight alameda and then we would do a ledger transfer on ftx affectively from alameda. to that to whoever sent that wire transfer in order to cr them. over the last few years we transitioned away from that system because you know over the last few years we were fx was was able to get its own bank accounts and its own name and you know straightforwardly take customer deposits through that. there was, you know, there are legal documents drawn up around that payment service relationship. I didn't know the details of foods and there was an accounting system built out for it that I i know the details of my understanding. and it's a set of developers. It's i, i, i.

I honestly don't remember. It was three years ago and / years ago. And you know, I i think that I was probably involved in some very high level discussions around it, but I don't remember like you know, and I don't know if I ever knew exactly who was involved in making exactly those decisions. thanks. So good. Can you point to in what way sorry all these it can be done in a poor manner like you you could implement it in a way which is not ok and and I think it should be disclosed which it was disclosed and and. none of this was on ftx us. And by the way, ftx usa to my knowledge is fully solvent, fully funded. There's nothing strange that happened there to my knowledge and I think should be returning all customer funds and should be opening up withdrawals, so. i'm an idiot. I don't know. I was given poor information by lures. I was pressured very heavily to do so by people I no longer believe were acting in the interest of customers. It was : am. I was extremely exhausted. Being hounded by many people. I made yet another really poor judgment call. I i was speaking with legal counsel at the time. I actually don't know if i'm even allowed supposed to say who is there, but. i'm in general hesitant because of there are limits to what you can say about some conversations that involve legal, legal counsel. And so I was, I was just being as an of an abundance of caution there. But if there's an importance here that that you want to dive into, i'm happy to do it. so I do have legal counsel right now. I i have new legal counsel.

And you know, i. uh, there were a bunch of different questions there. Uh, i'll, i'm, i'll try and go through some of them. I i'm not going to remember all of them but I but but by going through some of those. So umm as for why you know brett and trabuco left. I i don't think I have anything to do with this. I think you know and they can talk to themselves about why they did but you know from my you know from from from what I knew I i think it was entirely I think it was personal. in terms of talking about. I in terms of talking about you know timing, I don't have granular detail here. I don't have access to that right now and I wasn't running out of me. So I don't know exactly what happened. I don't believe that there was a large loss coming from luna itself. But I do think alameda was probably quite long the market in general that it had a net long position and that the general market collapse that happened then did decrease its asset values. a a nontrivial amount I i think there are a lot of other questions asked, but i've forgotten those at this point. so I just to kind of jump ahead of some of this, I think those are all very similar statement. i'm not sure. I was vaguely aware of some things related to that i. not in john. I i don't know that I can make a statement about ever. I can't remember having been consulted on you know many things really telling me a press. I don't remember this particularly coming up and I i think I may have been. 

Sorry, I remember chatter about some things like this in the crypto ecosystem. so can I answer the question now? thank you. So i'm not surprised by the fact that alameda was a large fraction of stable coin deposits and withdrawals on ftx. That doesn't surprise me at all because alameda was first of all a large fraction in general of stable coin deposits and withdrawals and activity in the crypto ecosystem. But but second of all, I specifically did do a lot of cross chain conversions of stable coins within through ftx. So in terms of. raw notional of blockchain and particularly of stable coin deposits and withdrawals, especially just in a sort of like sum way where there would be some deposited, some withdrawn. That doesn't surprise me that alameda had a significant footprint there however and and and in retrospect I certainly wish that I had done a much deeper dive into alameda's positions and balances and the history of that on ftx and that was absolutely huge oversight, the comments that. so the comments that I had been making were around its trading activity and alameda's trading volume on ftx had dropped from something like % of volume in to something like % of volume in . 

I've said it many times, I don't know how one would verify it publicly, but you can. you could ask the relevant teams. You could ask the chapter team for that data. You could, you know, you could ask anyone who has looked at that day. You could ask many different people. You could look at the files that we submitted time and time again to various ok, yeah. yeah. So, so from a trading and volume perspective, it was the case that alameda had become a fairly small fraction. of ftx's overall activity. Now obviously that was not true, as it turns out when you looked at alameda's positions on the exchange and again like. i've made a lot of mistakes here and I and that was certainly one of them was not paying more attention to, to, to, to balances and positions. I was looking at volume because that's what drove revenue and that's what to me seemed to be driving like business growth. And so is looking at you know volume broken down by I mean by account but also by you know geography, by source type, by product, you know growth over time relative to other venues. and and there is nothing that was a real, there's nothing alarming happening in those trends obviously in terms of of positions there was in terms of the on chain deposits and withdrawals. that's actually I think a little bit of a different thing which is neither of those two and I think is related to the fact that you know. alameda I used ftx to convert between different stable coins a fair bit and also I would you know there were a lot of. 

So one thing worth knowing here is a lot of the relevant wallets got misidentified on things like chain analysis between alameda and fx. and some of these wallets were basically what fx was using to convert between two different stable points. So if a user, you know deposited a lot of b usd and then wanted to withdraw us dc, there would have to be basic. And if you know the reserves were mostly in bc at that point they'd have to be a redemption if the usd and then you know a creation of usd c which would be sent back.

And so that activity represented a fair bit of blockchain based stable coin deposits and withdrawals to and. mtx, although it was fairly separate from the rest of what was going on. so there were some ways that we did. Obviously there are ways i. like deeply, deeply wish that I had done way better at and deeply regret what happened. The ways that I had been focused on it the most had been looking at a combination of basically of like looking at the cyber security side, you know, ensuring that there weren't, you know, hacks on on the wallets. you know keeping a, you know accounting of the the assets, making sure that that didn't deviate from what you know some balances was getting you know gap audits at the end of each year and I and you know also just dealing with frankly a lot on the fiat deposit withdrawal side where customers would be trying to send money to and from the exchange it would get. I it's. I'm sorry, i'm not. I'm not % sure if it's public who that is. I i can. so after presuming that that that that it is I i think probably somewhere here can confirm that it is public, but yeah. I there is a statement that was roughly like that, I don't remember the details of it. I i don't believe that i've confirmed that I was the one who did it, because I was largely not, but in addition to that. sorry, intentions to do what to move. that I told who to do that because I don't believe that's correct. accident that you were. Hey, sorry, the incident that you were referring to is a different one, I believe, or at least the incident that I like.

If you repeat where that came from, the the incident that I believe or sorry, start that question over again, I at least inferred that you're talking about a time when bohemian. no, those are referring to different things. Those are referring to two different incidents. that was a separate thing where we briefly had withdrawals open for some bahamian residents on the exchange. That is something that I think was you know, for a day or so before abuse of that forced us to turn it off and is a a completely that was prior to chapter , that was prior to any filings. That was when I was ceo unambiguously of of of all of ftx and was unrelated to the other incidents that have been referenced in filings and other things. I so there are a few answers that the first is that there were a number of withdrawals that did happen on the exchange. It is not the case that all of the funds were not available. I think we processed I want to say something like $ billion of of withdrawals over you know a few day period. And so part of the answer to that question is that they were you know a lot of those withdrawals. our process prior to to reaching the peak of the liquidity crisis and prior to, you know, withdrawals being effectively halted, there are I think a bunch of other things going on as well there, some of which i'm still digging into, some of which i'm still piercing together. But, but, but yeah, worth noting that like yep. right. So one piece of this is that in the, in those few days following the collapse, we processed about $ billion of of withdrawals and those withdrawals in general were from a variety of sources including some of those coming from, from you know futures position from margin positions that were open and that meant that. by I that there was not a clear. that, that, that, that, that effectively, I think broke down some of that distinction between the two sources. Again, i'm trying to, you know, i'm, i'm trying to piece together all of what happened and I don't have access. to i, you know, to put all of it together right now, but my best guess is that that was at least a significant part of it. that's right. Yeah. In general, balances were treated as effectively fungible with each other. yeah, uh, i'm not surprised you're confused because it's confusing. And I and it confused me and i. There were a lot of poor decisions made there on on our part. my understanding and again i'm i'm not % confident in all of this. I am still trying to piece together all of this again without access to data in retrospect. But but my my general understanding is that and and and here you're referring I think to the you know especially the sort of - era where there were no fx bank accounts but where some customers were wiring straight to alameda research is yeah totally. yeah. So I believe that was part of the story and and again I i'm not % confident i'm i'm working with what I have here but I believe that that is that what you said is effectively part of what happened. I'll give one caveat to it which is that I believe there was a ledger transfer away.

You know, it wasn't just a pure cring of the customer and there was a transfer from one account to another but that that debit didn't clearly show up as a debit on alameda's main account and so did not cl right on the dashboard to the the risk of of alameda's position, which is one of the things that led to me being surprised by the size of the position. yeah. Or another way of phrasing that would be there is a negative balance balancing with that, right? Yeah, yeah, I i believe that what you're saying is in fact part of what happened. so I we say move them. This was a question of which withdrawals and which jurisdictions were open when. There were other jurisdictions where thralls were open as well. It was not a single shut off on all process. But yeah there were liquidity issues creeping up and and we had a staggered shut off effectively of of I withdrawals. There was not large size for what it's worth that went out there. um, I nearly the entirety of the withdrawals that we processed, I wanna say. something %, I think more than % of the withdrawals. were all done prior to any shutdowns, but there was a little bit left that came out from some jurisdictions, the bahamas being won, japan being another given that japan has segregated assets and and there may have been one or two other jurisdictions as well. so I i wouldn't say I moved them. I needed the question of whether to close withdrawals and and it was you know accounts choosing whether or not to initiate withdrawals. I wasn't initiating them but but yeah that was one of the jurisdictions that we were last two turn off withdrawals and that is correct and i. you know, it felt appropriate given that that was where a primary regulator was, that's where our, our headquarter was and but you know after after about a day of that we started to see some signs of people trying to abuse it and we shut it down.

I argued for quite awhile to keep them out. In the end, I was informed in a way which I i no longer believe was true, that this filing would not mean that withdrawals would be shut off there, that this is not yet did not mean a bankruptcy filing. That was just a provisional step, but that appropriately appropriate and responsible steps would be taken in those jurisdictions. I am surprised at what happened after my filing. I don't know why that's what happened and I and I regret it. I wish I hadn't. I wish that I had done what you're saying that being said, right. So the reason that I didn't file those in particular was those were entities where local regulators prior to my filing had already stepped in and initiated their own processes. And so I couldn't have even if I had wanted to offer those entities. i, i, i, I don't dispute that I said something like that. acknowledge your question. I you know want to make sure that I operate in a you know responsible and compliant manner here. I, you know would be discussing what would or would not be appropriate with council. And at the end of the day I think that the right parties to be filing here would not be you know, I i think that the right parties would be you know regulators, administrators who are overseeing this internationally who have been. uh, you know the charge. But I i acknowledge your question there. I can't go into the details. There are also potentially various relevant dod policies which are being examined as well but I but I you know frankly that's that that is a concern for me. I don't know the details of that that happened after you know, the chapter team. But i, you know, I i think I to my knowledge this sort of on chain analytics. As long as you don't count the as long as you make sure to distinguish between the various custodial processes that were taken, then to my knowledge have done a decent job of tracking what that was. But I don't know a ton more than that. I went one day. I say that. so I would be surprised if i'd said that it had done that. I think I wouldn't be surprised if i'd speculated that maybe the notion of it was something kind of similar to that based on what had happened on chain, but I don't think I know exactly how much it was or from exactly what entity. so I will make a few notes that this is all as of when I last looked into it and my data is somewhat still here. So i'm i'm just you know guessing as best I can. First of all the funds moved off they're also funds moved on. There were a lot of deposits and withdrawals on ftx us for many customers including alameda, but those were those were fully solvent accounts and. into my knowledge, you know, all the customers ended positive on ftx us such that there was no hole created by any of that activity.

There's not an equivalent to what happened on the international exchange. So that part would not contribute to it. In terms of the hack, I don't know how much that came from ftx us. I i, you know, might be knowable from looking on chain activity. I had believed ftx, you know. Oh, sorry. Yeah. starting back, but I i had i, you know, and basically like I to my knowledge, I think that there were substantial surpluses there such that I think it would still be, you know, to my knowledge, solvent, although again, I don't have access to current data. are these ones that were processed right like shortly prior to that or that were processed that were and? so I can't speak to the actions taken by, you know, people who are running that business right now or what decisions they are or aren't making. Just my belief that there would exist the funds to pay out to customers were that to be the the chosen pathway. But I can't speak to which decisions are being made about whether or not to choose that pathway. I mean I so I don't know the details of individual transfers. Ach transfers can take a week to clear sometimes. but, but again, I don't. I i don't have access to look into individual ones. I, i, i. there were lots of customers charging back to fss everyday attempting to ach and then retroactively cancel those. Those were solvent customers, although dicks.

I i don't, I don't know the details of this system, but in general, you know, us transfers are quite messy and for both ach and cr card related transfers it is very difficult to have confidence I in a transfer until as long as a month after it's been initiated so that that that is a mess. so it's a good question and you know there was a group of employees you know working around me to try to do what we could. I was calling a number of prospective funders to investigate, you know, potential opportunities to. so I mean I was yeah I was calling basically I and calling and or speaking to in person you know primarily other core employees of the company's other employees who had you know relevant stakes in it, who had you know relevant thoughts. But it was you know was the core employees were the bulk of who I was you know counseling with. Then we I did call you know some external advisors, a few key investors, I called a few. I she was not physically in the same place as you know this is happening. So there were you know a fair number of phone calls, you know, to do exactly what you said. Like as soon as this happened, you know, one of the first things that we said was we need to know exactly what the deal is with not just alias balances and positions on ftx, but everywhere. You know we want to know exactly what funds there are. We want to know, you know, whether margin call will be able to be hit. We want to know ho you know, with her around around that, although she, again, she wasn't physically in the bahamas when this is happening. And so I was, you know, speaking more frequently in some sense to the, you know, the employees who were who, who were there. I don't wanna, I think, go into where specific employees heads were at just because I think that's for them to talk about it if if they want to. yeah he was he was a, you know, a big employee of of of the company a big part of our legal team. I think that I that you know everyone served in those positions where people are trying to consult with and you know I don't want to sort of go into details of where they were out unless they kind of give me permission to do so. But but you know you can look through who were you know the core developers, the core people on the legal side, the core people on the you know, ventures m and a side and on for support, vip support, like all of those people were sort of huddling around to some extent and, you know, trying to figure out like what the right things to do were.

But at the same time, I was not as communicative to some of those as I wished that I had been. I was, you know, including some people on that list. And I i think in retrospect that was a failing of mine as well. I was very nervous to see something companywide that both because I i wanted to make sure I didn't say something. that I didn't believe and I wasn't sure what was happening. Like I was trying to figure it out in real time, but also because at some point everything that I said started leaking out pretty quickly and so it sort of broke down the ability to have that much of a distinction between company wide communications and public communications. But I think in retrospect. I wish that i'd just been, you know, saying what I knew when I knew it, pretty transparently, and accepted the fact that I was going to guess wrong sometimes and the fact that a lot of it was gonna get out publicly. Because I think I owed it to the employees who had been fighting with us for for years to tell them what I knew when I knew it, even if I wasn't confident in it. and I do think that there was umm you know almeida ended up with a substantial margin position open on on the exchange. I think that you know the I you know which is the overcollateralization margin position was a fair bit of it. I think that the avenue that that ran talked about with the historical wire transfers was was was part of it as well. I think you know you add those up and and I think you probably get to to to to most of it although again this is I don't have. hold the day right now.

So that's that's sort of piercing together and a lot of these things were things. right that there it we see that they're able to margin do you? I they were you know and the collateral came from assets that alameda owned and the liabilities were you know short margin position open on, on ftx coming from you know the assets that that ftx had. ohh, a lot of these are things that I have pieced together after the fact that I did not know at the time or was not fully aware of at the time. You know, this is sort of a hodgepodge of things that I knew, things that I didn't know but have since found out, and things that i'm i'm guessing at and given what i've been able to find out, but i'm not entirely confident in. I yeah, I mean a lot of clients were doing that. I do believe alameda was doing that as well and was doing that for a substantial size. I i don't believe it's more than we're unlocked because all fg tokens are unlocked at this point. There are separately. So I think that what coin gecko and coin market cap sort of denoted as as circulating tokens. I believe that was effectively not counting ftt tokens held on ftx. I think that's roughly how it was implemented that it was because it just done by looking at a set of blockchain addresses and they were basically taking all tokens except for those on some specific subset of blockchai dresses. And I think what that was doing was just excluding at least some if not all of ftx's wallets from that calculation and probably had been for a little while. So I think that the the circulating supply calculations on coin market and coingecko were, I mean they're displaying a particular thing. I don't think that that thing was was necessarily what was the most intuitive thing, but all ft had been unlocked for a little while. 

I'm so confused. So first of all, I didn't. I didn't say like new as of when that that was happening. It's not clear to me what you were saying there in terms of when I knew that, but second. wait, i'm not sure. Sorry. Uh, i'm not sure i'm even agreeing that that is what happened. I'm confused by that statement and. umm, i'm not sure about a billion numbers, sorry. If you could point me to this article I think it would help. I i. i, i, i, I mean, there are races over the course of , yeah. I don't remember how much that round was in was at the million round roughly. to my knowledge that was used for acquisitions for for ftx. ohh, sorry, the the particular $ million from the resale? that i'm not sure that's that same round that you're talking about. I think that may have been that one of my memories it was it was a different but you might be right. But either way that was you know or slightly before that I had bought binance out of their stake in ft x for a few billion dollars and then had resold a small portion of that secondary to investors. So it went to recouping the cost from. I may said I did like very. I don't remember exactly how I phrased it, but I i did way, way less than I should have. sbfpause so there was some risk management in place. I myself did very little there. I wish that I had done way more and I myself did very little in terms of appointing anyone to do it. Now, there was a lot of risk management that was in place in terms of automated, you know, risk management systems, but there was not, in retrospect, good oversight of this. That was a big mistake. I don't believe that I made any material misstatements to prospective investors, although obviously i. more_timeadd item recollection of everything that I said. Everything that I said I i thought to be true. I don't. I don't remember in detail. I don't remember detailed conversations about it. I'm not sure there weren't. There were a lot of conversations that happened. but I but I i you know, i'm. I'm.

I'm not sure there weren't. I don't particularly remember on many. and I think that there were due diligence on on some things. I think there's a lot of due diligence done on my sense is that ohh, yeah, sorry about. my sense is I and I don't want to put words in other people's mouths, but you know, my sense is roughly that when people were doing their diligence here on that perspective, investors were thinking of it primarily from the perspective here. i, you know, they were looking at the upside here. They were looking at, you know, what could the business become, how could it grow. That's what you generally do as as a venture investor. And if if you are, you know, primarily concerned about, you know, the downside of venture investment, that probably means it's an investment that you don't want to make and aren't going to bother investigating in the first place. i'm not necessarily saying they didn't need, I mean I don't want to make a statement about what they needed to or didn't need to do. But I think from their perspective that they saw themselves as I i would guess as primarily looking into what is the upside of this business and yeah, sorry but but you know at the end of the day like obviously they, I don't want to talk for them like they should talk for themselves. they don't remember having like a specific. you know, update specifically related to that I i don't remember everything that's been said but i. i'm i'm not sure exactly what you're what you're getting at there or or or you know if you're asking like did I have a special session where you know called like updated risk management like no. yeah.

Uh, we would have a call every every few months to talk about the business. I don't think it particularly did. sorry, you said that at the deal book summit, I said. i'm good at algorithms which determined the price of those on the book. I think I was, i, I sorry, I don't remember the exact phrase that I said. It may have been me just saying like you know we as in like ftx you know the, the, the, the product we're marking all assets to market prices. but i'm sorry, I actually don't remember exactly what I had said then. sorry so this is to be clear marking. the assets of alameda on fx right looking at the the collateral that elimia held. yeah, but I think that was implicitly the collateral that it had on ftx is my memory of what that was referring to. But I mean I either way, sorry, I can I can talk about what, what, what what I actually think here. which is that that that you know I i in general like ftx was marking assets to what their market prices were and that when I was thinking about the risk profile of large positions on fts and specifically of alma's position, which I was also surprised by the size of in retrospect. But but in addition to that that when I was thinking about not from a formal marketing perspective but from a. just in my mind, how do I think about this? Is this something I feel nervous about? Is this something that I need to be investigating more perspective on that I was substantially underestimating what crash with risk would look like. And I was thinking about, you know, % haircut as a substantial, you know, very large haircut rather than, as you know, possibly even an underestimate of what would be necessary for a short period of crash in some circumstances. So you know. and I think it was I i. I i certainly think that I i made some big mistakes there and how I was thinking about it. so I i I think that I i I frankly don't know actually exactly what you're referring to there. I am sorry did not hear that particular one. I'd love to look into that more if you could like send me a link to that and get back to you on that but an fx didn't trade as well so for. 

So I i I think you're probably talking about alameda. They're not ftx and I don't know the details of that. I'm i'm sorry I wasn't running alameda and I but I can I can try and look into that. no, I i was, I i actually know surprisingly little about the luna side of this. I don't like to my knowledge neither you know, ftx nor i, you know, nor alameda were particularly involved in luna. Obviously the market crash was quite relevant for them in the industry as a whole, but but I don't think that that there's that much specific. if any specific luna involvement, I think that there were. I guess I think that like. I mean they're obviously a lot blowouts in like borrow lending desks around then that came from sort of secondary exposure to luna, you know, flowing through three arrows and and other places, but I i don't know much outside of that. I think there are probably a lot of good arbitrages to do like I do think that is likely the case and I think that you know things were just like not trading really exactly in line for most of that period. So I yeah, I think, I think they're really good trades to do then. I i don't. I obviously it's a meetings with like barrow lending firms around that time around the troubles they're facing. But I i don't unfortunately know anything about you know things specific to to to really like the luna side. uh, potentially i, i, i, I suspect that I have been messaged about that. I'm sorry, i'm still digging through my my backlog of messages, but i'll try and i'll try and put that on schedule. yeah, it was um and um, I mean. look, mostly I screwed up and I and like. I feel incredibly bad about that and it hurt a lot of people and. 

I you know, whether or not it matters and can do what I can to try and make it right and and and I don't want to try and deflect responsibility from that. you know obviously there are other things that also contributed to what happened and you know there was a a pretty sustained pr salt which I underestimated and and you know underestimated the impact of an underestimated the execution of and I think that was quite impactful and was you know what sort of with the match here but but that doesn't change the fact that I wasn't on top of my shit. I i'm not sure, not to my knowledge. uh, I don't. I don't know if cases where we where we did I i mean, I wouldn't necessarily know if like someone had at some point made some donation on behalf of someone to you, but like I don't know if that having happened. I can't talk about, you know, any specific communications or lack thereof with specific, you know, regulatory agencies, but obviously would be, you know, looking to engage constructively if you know, if and when that were to happen. I mean it's a true fact. It's like ftx us was in fact a segregated business and it didn't have you know any of the properties that that that led to the issues on ftx international. And so you know to my knowledge it is solvent and and that doesn't take away what happened on the international platform but I but I don't know at least it's something. I no ftx us was to my knowledge always solvent. so I many of these things were things where I was not the one who was primarily doing them. And then many of these things are things where there exists data that would make it entirely possible to answer these questions. But unfortunately I don't have access to that data right now.

And you know you could ask the chapter team to try and get access to to such data that might help answer some of these questions. But I you know, I i don't I don't have that data about my you know the companies. so, you know, I mean, look, a lot of this isn't in my control right now. And, you know, a lot of this is, you know, going to be up to the, you know. global administrators and regulators who are involved but i'm happy to be of assistance to any of them anyway that I can and and you know in any way that they want me to be. But you know I would be excited to be to the extent that you know I could help find you know help put together anyways or or be a part of that to help make you know make customers more whole by you know probably by there being more funds for them to have access to. so I so and and again some of these are things i'm trying to be together I don't have the full answer to but but I think that part of it was I believe that there was you know a correct ftx accounting on in terms of you know the audited financials.

But I but that at least I can say that when you sort of pulled up you know on a dashboard what. what, you know the accounts look like. it would not have i. It wouldn't have I displayed, you know, those transfers, and it wouldn't have displayed the balances related to those, which meant that it was that the sort of what you would naively see as the relevant, you know, it's the relevant sort of position size was quite a bit smaller than what the full position size was. yeah, it's something roughly like that or at the very least that the, the, the, the common displays of it did not, did not, did not include that piece of the accounting. I don't know what to say. Like I i had a lot going on. and I was spread then I was a bit less grounded than I had been before. and I lost track of a lot of important things and I i mean, I think that. was not aware of a lot of what was going on. I was vaguely aware that some of these systems existed. I ain't no details of them. And I and i, you know, was not spending much time. and on, uh, looking at, you know, position risk management, it was a big mistake.

I mean, look, i'm incredibly sorry about what happened, and I know that doesn't change anything. i'm gonna do what I can, even if that's not much. But at the end of the day, you know, hopefully, um. hopefully there will be pathways that we'll be able to get more funds back for users. Hopefully there will be pathways that open up withdrawals where they can be and that maximize the value ultimately that users can get, but. you know, in the end that's, you know, a lot of that's not gonna be up to me. I'm just going to try and be helpful where I can there, but i'm, i'm sorry. I am sorry i'm very late uh for uh for an excel so I i do have to hop off now but I all I can do is I can be helpful to you know all the teams who who want me to globally and you know i'm going to continue to to do that. You know if and when i'm asked and you know look for other ways over time that I can you know hopefully help contribute but I but yeah there's you know there's a limit to how much you know. different groups are gonna want me to, and I understand that.