The Collapse Of FTX: Insiders Tell All | CNBC Documentary

(confusing group chat) He had become a celebrity. No doubt. She is one of the richest people on the planet and, without a doubt, one of the youngest rich people on the planet. He appeared on the cover of Fortune this year and was compared to Warren Buffet. Billionaire Sam Bankman-Fried, 30, better known as SBF, experienced a meteoric rise as the golden boy of cryptocurrencies. The more time he spent with Sam, the smarter he felt he was. My goal is to be able to donate almost everything I earn. A seemingly altruistic billionaire looking to make a big impact. I don't give a damn about my legacy, like I care about the impact I have.

He struck me as someone who was really trying to do something transformative. That is why the crypto scandal that engulfed him shocked the world. News overnight. Sam Bankman-Fried is now detained in the Bahamas. Its $32 billion cryptocurrency exchange. FTX goes bankrupt in a matter of days. $8.9 billion in client funds are missing. I thought he was the Mark Zuckerberg of cryptocurrencies. Is he now the Bernie Madoff of cryptocurrencies? Top minds on Wall Street, Silicon Valley venture capitalists, A-list celebrities, and millions of cryptocurrency traders flocked to FTX to trust their money to Bankman-Fried. I lost over $2 million on the FTX platform when it stopped working.

Now FTX clients who lost millions are sharing their stories. It's very, very sad. Really sad not only how it has affected me, but how it has affected millions of people around the world. The investors who gave FTX tens of millions in capital are speaking out. Then you feel betrayed. Ah, 1,000%. I am betrayed and disappointed. And the former president of FTX US, who resigned less than two months before its

collapse

, says it all. What Sam did was old-fashioned financial fraud. So far, all anyone has received from Bankman-Fried is an apology. I am deeply sorry for what happened.

And customers want answers. I had never lost so much money in so long before. This was probably one of the scariest moments of all time. I'm definitely mad at SBF. This was an entrepreneur who could have done really great things. How did everything go so spectacularly wrong? I'm not going to review the story. I liked and trusted him. How could so many people have been fooled? With an entity like FTX, there were clearly red flags beyond anything I had seen before. And will your clients ever get their money back? I'm in a pretty big hole right now.

I'll probably have to declare bankruptcy. (brilliant music) A stone's throw from the turquoise waters and pristine beaches of the Bahamas, Sam Bankman-Fried establishes FTX headquarters in Nassau. What was the royal headquarters like? I think they had three or four, what effectively looked like suburban office buildings that they were putting together. It looked like a very large trading floor, not unlike what you would see on Wall Street. In less than two years, this small office park in the Bahamas becomes home to one of the world's largest cryptocurrency exchanges built by traders for traders. The platform worked. It was probably the best platform out there in terms of user experience.

According to FTX, more than 5 million users flocked to the exchange and were trading a lot of money. You know, we have between 10 and 15 billion dollars of daily trading volume on the platform. From Wall Street to Silicon Valley, some of the smartest people with money are desperate to get in on the action. And he was an industry leader and a pioneer in cryptocurrency exchanges. He had a great vision for the future and was minting money. Investments in FTX total almost $2 billion. I think his impression was that Sam was the ideal tech founder who had landed on a gold mine.

He had this way of making everyone really want him to succeed. He was this incredibly in

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igent person. He was ambitious. He had good pedigree. He had gone to MIT, his parents were professors at Stanford University. He had worked at Jane Street, an organization that everyone on Wall Street respects. And that combination of things is something quite interesting. For retail trader Sunil Kavuri, who worked in traditional finance at Morgan Stanley and JP Morgan, learning about these investments gave FTX serious street cred. They raised yes, a significant amount of funds, around $900 million from Sequoia, Paradigm. I thought, okay, this is a very secure institutionally backed exchange.

Kavuri moves millions to the exchange. Cryptocurrency enthusiast Evan Luthra does the same. 100% he was aware of all the VCs who invested in FTX and that is also building from trust. Seemingly out of nowhere, Bankman-Fried and FTX start to become the biggest names in crypto. This is a story as old as time to some extent. A charismatic young man with shorts and loose hair captivated the 20 best investors in the world. The young billionaire crypto titan's overnight success was featured in magazines and on television. Thanks for inviting me. In the otherwise secretive world of cryptocurrencies, where exchange owners are camera shy, Bankman-Fried stands out and welcomes the publicity.

I would say it definitely played a role in finding out who was really behind FTX. I think what really gave him credibility were the exponential profits he was making for investors and the billions of dollars he was throwing away as monopoly money. The FTX co-founder is spending millions promoting the exchange with high-profile celebrity endorsement deals to attract more and more customers. It became an obsession. More sports teams, more sports celebrities, different types of properties we could put our name on. NFL superstar Tom Brady becomes an investor and appears in FTX commercials. FTX is the safest and easiest way to buy and sell cryptocurrencies.

Comedian Larry David stars in a Super Bowl ad that cost millions. FTX is an easy and secure way to get into cryptocurrencies. Hey? I do not think. Marketing works. For FTX, the first time I heard about this was in the Super Bowl ads. I thought, oh my gosh, there are all these big name people using FTX. All the A-list names associated with FTX give clients the impression that a lot of diligence has been done on the exchange. Did celebrities make me feel more comfortable using FTX? Personally, that's how it was. But in reality, everyone involved is betting on the success of FTX and trusting its founder.

Remember when you talk about a venture capitalist, you're talking about someone who takes risks with capital, you're going to pick one for 10, you're going to pick one for 15 and in that you can find Google or Facebook, so Sam was one of those. 15 or 20. But customers who trust the exchange have much more to lose. The money was intended to buy a house. I don't have that anymore. I own this condo. I've had it for six years. I don't want to just have to part with it. And in November 2022, the entire operation falls apart in just a few days. (dramatic music) The implosion of FTX begins in the suburbs of Chicago.

Nick Baker, editor-in-chief of CoinDesk, a cryptocurrency news website, is working from home when one of his reporters approaches with a story. Ian Allison, our reporter, started listening to Alameda: This business venture owned by Sam Bankman-Fried may not be on the strongest financial footing. Ian heard this from a source. As a journalist, you listen to advice and that's great, but the challenge is, well, how do you test it? They confirmed the data with a leaked copy of Alameda's balance sheet. What the document showed was that, in a very powerful way, there was a very strong financial entanglement between these two companies.

Their article is published on November 2, exposing for the first time that almost half of the $14.6 billion in assets on the balance sheet of Bankman-Fried's secretive crypto hedge fund were listed as FTT tokens, Bankman-Fried digital currency and its co-founders. created for FTX clients in 2019. That's potentially a red flag because it

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s you that much of this empire is built on a foundation of money that comes from a sister company. To better understand why that revelation leads to the

collapse

of FTX, you need some background on FTT. The FTT token is basically the token of the FTX platform.

The benefits you get from the FTT token is that you get a reduction in trading fees. I invested around $200,000 in the FTT token. SBF regularly showed that he was personally buying FTT tokens, so I saved it. When FTT first hits the market in July 2019, one token costs around two dollars. By 2021, it skyrocketed to almost $80. And in November 2022, it is trading around $22. The idea was to give people almost an ownership stake in ftx.com. If you were someone outside the US But Harrison and FTX customers say they were unaware that the FTT token was not widely distributed, which is key for the market to determine its price.

A substantial portion of all existing FTT tokens were on Alameda's balance sheet. According to the criminal complaint, SBF engineered the price of FTT by ordering Alameda to purchase large quantities of the token to maintain its price and that created a big problem. Alameda couldn't have sold its billions of dollars worth of FTT tokens without driving down its price. His presence there, there is such a substantial presence in that balance, was a suggestion that perhaps this is a house of cards. To make matters worse, Alameda began using it as collateral to obtain billions of dollars in loans from third-party lenders, leaving Alameda exposed to significant financial risks according to the complaint.

And by the summer of 2022, several of Alameda's largest lenders go bankrupt. After a $2 trillion drop in crypto markets. It was probably an opportunity for Sam to say, "Wow, I just got smoked along with Terra Luna, Celsius, and Three Arrows. I'm going to shut down Alameda and focus all my energy on FTX." I think if I had done that, I don't think we would be in this situation. Instead, under Bankman-Fried's direction, Alameda significantly increased its use of FTX client funds to meet its foreign debt obligations. According to the CFTC. FTX customers know nothing about what is happening with their money.

Their first hint that there might be trouble at FTX came on November 6, four days after the CoinDesk article revealed the billions of dollars in FTT tokens on Alameda's balance sheet. One of FTX's biggest investors gets scared. The CEO of Binance, the world's largest cryptocurrency exchange, who goes by his initials CZ, makes an announcement in a tweet to his 7 million followers saying: We have decided to liquidate any remaining FTT on our books. And recently, with the news of their insolvency published by CoinDesk, we first said, "Well, we want to sell those tokens." That's all we did. A single tweet from CZ is enough to send some customers into a panic.

Many market participants got scared and withdrew money. We are seeing the beginning of a bank run. And that was generating $4 billion a day in customer withdrawals. At that point, we started calling potential funding sources because I was nervous. But publicly, Bankman-Fried tells her clients a different story. On November 7, he tweets that a competitor is trying to come after us with false rumors. FTX is fine, assets are fine. SBF went on Twitter and later said: "A competitor is attacking us. We do not accept customer deposits and we do not invest them in anything, not even Treasury bonds." So I think that reassured me: okay, this is just fear on the part of market participants.

Sunil Kavuri, Jake Thacker and Evan Luthra keep their cryptocurrencies on FTX. I didn't think this was really a cause for concern because I had all this faith and trust in the system and I had already been building it over time. But the next day, Bankman-Fried deletes that tweet. According to the SEC, the price of ITT drops more than 75% and it is now evident that Sam's empire is crumbling and investors like Anthony Scaramucci are worried. I went to the Bahamas on November 8th. I flew there. Sam seemed kind of dissociating like in the scene in "Private Ryan" where you know the battle is going on and someone loses his arm and is actually holding his own arm in his hands.

He was having a hard time processing that all of this was happening to him as fast as it was happening. I left the Bahamas saying, "Okay, there's a big problem here." In a last-ditch effort to save the company, Bankman-Fried makes a surprising move by calling Binance's CEO with an offer to sell them FTX. But the deal never takes off. Patrick Hillman, Binance's chief strategy officer at the time, was able to see FTX's financials firsthand as part of his due diligence team. It was as if a bomb had exploded in that place. We are receiving calls,people are crying even though we were within the first 12 hours of this crisis for them.

So complete chaos ensued there. What did Binance end up finding in the due diligence process? We couldn't do due diligence for so long. You asked for specific information figures. The most basic figure is how much cash you have in reserves and what your liabilities are, right? How much do you owe versus what you have today? And we couldn't understand it. The possible agreement with Binance falls apart in less than 48 hours. I'm thinking, Binance pulled out, this is something very serious. When CZ and Binance basically said, "We're not doing the deal." That's when I thought, uhoh, now I have to do everything I can to get what I have left.

This was probably one of the scariest moments of all time. And for many customers, it is already too late to withdraw their funds. I requested all withdrawals from all my assets but none were completed. None of the withdrawals materialized. You are simply helpless. What I do? I was so shocked that that could happen. I obviously had a lot of money in the trade and I thought, okay, something's wrong. Why would I stop withdrawing money? Because the exchange is if everyone takes out the money, the only thing that should be left are the exchange assets. I thought this was very wrong.

I felt really sick. It is clear that FTX and Alameda cannot survive. And on the morning of November 9, around 10:00 a.m. At a general meeting, Alameda CEO Caroline Ellison told staff earlier that year that in response to an accounting or bookkeeping issue, Bankman-Fried and others decided to use FTX. client funds for Alameda. According to the CFTC complaint, FTX and Alameda file for bankruptcy two days later. It's basically a bloody November. (upbeat music) Bankman-Fried spends the next month in the Bahamas inside the $30 million oceanfront penthouse where she lived with other FTX and Alameda executives. It is one of more than 30 properties purchased by the FTX group according to the bankruptcy team.

In reality, many people worked from this place where Sam lived and he spent only sporadic time in the office. It was like a university residence, like a university campus that they had created themselves. I traveled to the Bahamas shortly after the collapse to ask Bankman-Fried how this happened. My first stop, the FTX headquarters. Do you know if there is anyone from FTX there? Nobody is here. Is there no one there? Just three months before FTX collapsed, I interviewed Bankman-Fried at the company's headquarters. At the time, he was a frequent guest on CNBC. Sam, it's great to have you back.

The founder and CEO of FTX. Appearing on the cover of magazines and making headlines for rescuing other struggling crypto companies. When I asked him about the surprising resilience of his business during a major cryptocurrency crash, his response seemed plausible. How did you and your company's FTX and Alameda survive that accident? I mean, I think, first of all, FTX, just like our corporate cash treasury. I mean, our trading office is incredibly involved with the crypto markets, but we kept cash on hand and it's not meant to be something that has direct exposure to the market. I also asked Bankman-Fried to explain the links between her two companies.

What about the relationship between FTX and Alameda? I think there are some questions about where those lines are. Are there any potential conflicts of interest running as many companies as you do in the same space? Yes, I've done a lot of work over the last few years to try to eliminate conflicts of interest there. And a big part of this is that I no longer run Alameda. I don't work for that. Nothing about FTX separates SaaS and the way we view FTX is as a neutral piece of market infrastructure. During the two-hour interview, he talked about donating money to charities.

My goal is to put myself in a position where I can donate almost everything I earn. And he seemed to be an idealistic young billionaire. If you spend $300 million to buy a yacht, that's thousands of lives you could probably have saved in sub-Saharan Africa. Like most journalists at the time, I took Bankman-Fried at his word. FTX and Alameda were private companies that did not have to disclose their financials in the same way a publicly traded company would. But that interview didn't age well. And a few months later, I found myself back at FTX headquarters, this time covering the story of how the guy who made billions in five years lost it all in a matter of days.

I'm here to give Sam a chance to set the record straight. The FTX headquarters here in Nassau, Bahamas looks very different than when we were here just a few months ago. There was a huge FTX sign here that is no longer there. The parking lot is practically empty at the moment. And Sam Bankman-Fried, who was quite camera-friendly, has become quite camera shy. I pushed for an interview and after many texts back and forth, okay, we just heard from Sam. Bankman-Fried invites me to meet him behind these walls and security cameras in Albany, but he refuses to appear on camera.

I shared part of our conversation on CNBC Despite being kicked out of FTX due to the company's bankruptcy, he says he still spends most of his time trying to negotiate a bailout. A few weeks later, in an interview with CNBC's Andrew Ross Sorkin for the New York Times Deal Book, Bankman-Fried admits that he would have done things differently. I have made many mistakes or things that I would give anything to be able to do again. I never tried to commit fraud with anyone. But FTX customers who saw it don't believe it. I have zero respect for the person right now and anything that person says is invalidated in my opinion.

I think that's the media's fair narrative, like he's trying to frame the media's narrative to benefit him. So that part really pisses me off. I could literally see that she knew he was lying. He thought he could turn this story around. Less than two weeks later. As the sun sets on NASA on December 12, Royal Bahamas Police arrive in Albany. The police remove the former billionaire from the comfort of his penthouse and lock him up in this Bahamian prison. It's a hellish week for the former crypto titan who follows a strict vegan diet. He reportedly survived on peanut butter and stale bread.

But for those most affected, Bankman-Fried's arrest still doesn't feel like justice. SBF going to prison doesn't help me. I'm not getting up and popping bottles of champagne in the morning and drinking mimosas with my dog ​​because SBF got arrested right then and there. I still feel battered, bruised and completely demoralised. Billions of dollars are still not back in the hands of FTX customers and they want Bankman-Fried to pay. I think he should spend the rest of his life in prison. Literally, 100% is probably an easy way out relative to the suffering he has caused many other victims.

Extradited to New York in handcuffs. Bankman-Fried now faces a dozen federal charges in a Manhattan court related to the collapse of FTX and Alameda. From 2019 to early this year, Bankman-Fried and his accomplices stole billions of dollars from FTX customers. In a way, what is alleged is very, very simple, which is that Sam Bankman-Fried took digital assets or other forms of assets from FTX, moved them to Alameda, where he could have more control over them and use that money as your own. private piggy bank. John Ray, the former Enron scandal restructuring chief appointed as the new CEO of FTX, is leading a huge team tasked with following the money.

This is really old fashioned and embezzlement. It is simply taking money from customers and using it for their own purposes. What Ray discovered after first looking at the books is shocking. There is no type of registration. It is due to lack of record keeping. Employees would communicate billing and expenses in Slack. They use QuickBooks, a multi-million dollar company that uses QuickBooks. There's no independent board, right? We had one person really controlling this. How did so many people get lost? What on the surface seems to be so many obvious red flags? How was the due diligence on the part of the investors?

Reviewed a standard due diligence checklist, questionnaire, background checks, data room accounting, financial analysis, and audited accounting. He had it all. I mean, you can't fool 25 of the most sophisticated VCs in the world if you don't check the list, you know? So I had all the documentation that any experienced high-profile investor would really consider. Yes, he did it. There was no smoke in any sector of the business. Brett Harrison ran the US side of FTX from Chicago. What was his perception of FTX's financial health when he left? He had no reason to suspect that FTX was anything other than extremely profitable and in excellent shape.

Sam was embarking on fundraising. Again, he had said, both internally and externally, that ftx.com had $2 billion in excess capital as a result of its raises and that FTX US has six or $7 billion and they were in amazing shape. You think FTX will take over the world because it is very profitable. So some of FTX's top employees at the time didn't really have a sense of the company's real financial health. I can only speak for the people on the American side. We had absolutely no idea. How is that possible? Well, look, imagine in our position like you're in a high-ranking position, but you're not the CEO, do you think, okay, Sam has done all these public and private reports on the company's finances?

He really he should receive all the bank statements. He should have access to all of them and should review them and see if I agree with the accounting. Sam testified before Congress and is receiving public praise from the top investment firm. Should he also distrust everything he says in those two forums? I think anyone in our position would have a hard time thinking, okay, this is the moment I'm supposed to suspect something is wrong at the company. Whether or not you can understand how some of the red flags go unnoticed, it's clear that many feel misled.

Their explanation of how they think Bankman-Fried could have pulled it off. Good financial services organizations have many checks and balances because there will always be a person of conscience who will protect the organization from a group of scammers. And so he had a very close-knit group of people that he was working with. I would have to think that his inner circle of Bahamian people, that at least other founders would have known. (dramatic music) (siren wailing) On the afternoon of December 21, a convoy of SUVs carrying Sam Bankman-Fried arrives at a private aircraft hangar in Nassau. And as soon as the private plane is in the air taking Bankman-Fried to New York to face criminal charges, the Justice Department holds an unexpected press conference.

The Southern District of New York brought charges against Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX. Both Ms. Ellison and Mr. Wang pleaded guilty to those charges and are both cooperating. Gary Wang, the mysterious 29-year-old co-founder of FTX, ratted out Bankman-Fried. In his court testimony, Wang said that I was instructed to make certain changes to the platform's code and that I agreed to do so. I executed those changes, which I knew would give Alameda Research special privileges on the FTX platform. The coding guru testifies that he knew what he was doing was illegal.

Gary was someone who was very difficult to talk to at FTX when I went and occasionally tried to visit the office in the Bahamas. Gary was someone who never talked to anyone. I would arrive at 5:00 p.m. and would leave at 4:00 a.m. FTX engineering director Nishad Singh, 27, also pleads guilty to fraud charges. Brett Harrison says he expressed his concerns about Gary and Nishad in a letter to Bankman-Fried just before leaving the company. Gary Wang, chief technology officer at FTX and FTX rise, and Nishad Singh, chief engineering officer at FTX and FTX US, had written more than 90 percent of all the code for the exchanges.

And they did very little, I thought about really spreading the knowledge so that if any of them suddenly ended up in the hospital and couldn't come to work anymore, I think the exchange would have been made. It would have been over because all the knowledge was in the heads of those two guys. Alameda Research CEO Caroline Ellison, 28, also shares what she knows, telling the court: It was my understanding that FTX would need to use customer funds to fund its loans to Alameda and that most of FTX's customers did not expect that FTX provided. their digital asset holdings and fiat currency deposits.

We don't really do any technical analysis. In this strange interview with the podcast El Momento, less than six months before theAlameda collapse, Ellison makes some surprising confessions about managing the crypto hedge fund. We use very little math, we use a lot, like elementary school math. We tend not to have things like stop losses. Ryan Salame, former head of digital markets at FTX, subsequently pleaded guilty to two criminal charges related to the FTX case. Guilty pleas from top SBF lieutenants provide investigators with valuable information for their case against them. And one expert says all that information from the criminal case could also help the bankruptcy team track down clients and investors who are missing money.

If there is fraud and there are multiple agencies involved in the investigations, then you will spend a lot of time with attorneys and your attorneys will really stay close to those investigations. Greg Rayburn is the chief restructuring officer who presided over the WorldCom scandal, the largest bankruptcy in the United States at the time. When we came into WorldCom, we didn't know how deep the fraud was, but we knew what we had in terms of a pool of assets. We understood what the business was. We didn't have to do much guesswork. With FTX, you don't know what you have.

And finding out where the assets are could take years. I think FTX will probably be one of the longest cases simply because of the sheer amount of litigation that will be necessary. So far, John Ray and his team have recovered $7.3 billion in assets. The recovery process benefits from an increase in cryptocurrency prices. Recoveries, the bankruptcy court will establish priorities in terms of who receives payment and what of the recoveries. When it comes to Chapter 11 bankruptcy, especially when it comes to exchanges and things like that, the chances of you recovering some or most of your money are very low.

For now, only FTX customers in Japan have been able to withdraw their funds due to the country's strict crypto regulations. The company says its Japanese clients have been able to withdraw 6.6 billion yen, which is equivalent to almost $50 million. Other customers may take much longer to get their money back. I knew in a second as soon as the bankruptcy was finalized and declared that I would not have access to any of this money for the next few years. I have resigned myself to the fact that I won't get it all back. I think it will be a miracle if all the money is found wherever it is hidden or not.

And while the bankruptcy process is ongoing, the value of those assets in a volatile crypto market could rise or fall. I'm generally optimistic, so I hope we can get some money back. But Sunil Kavuri is hedging his bets, joining a lawsuit with other FTX clients who are suing FTX's celebrity endorsers in an effort to recoup some of their losses. Adam Moskowitz is his lawyer. Sam knew who to chase. He was going to go after people that most people would respect. So he went after Tom Brady, Larry David, Steph Curry and Shaquille O'Neal. We are seeing that each of the celebrities were paid millions and millions of dollars to express their opinion that it was a safe investment and that they should be held accountable for it.

Lawyers for the celebrities named in the lawsuit declined our request for comment. While the bankruptcy process and other legal cases trying to recover money from the FTX fiasco move forward in court. Some customers who need cash are now turning to other options. Several companies or individuals can go ahead and bid for your bankruptcy claim. (dramatic music) The biggest question on the minds of over a million customers and investors who lost billions on FTX is whether and how much they will ever get any of their money back. At FTX I had almost 60% of my cryptocurrency portfolio based on all the other bankruptcies and everything that happened in the cryptocurrency market, I was really worried about getting anything back and then how long I would have to wait.

I started looking at others like Mt. Gox and it took almost eight to ten years before people got any of it back. So Bhagamshi Kannegundla goes online to see if he has any options to get at least some of his money back more quickly. I started researching how I can get something for these bankruptcy claims. He found a company that would help him sell his bankruptcy claim for a small percentage of its cash value. This is how it worked. The bankruptcy claim was for $174,000. The buyer, after all the due diligence and everything, came down to about 11% of the 174,000, and I think it came out to almost 19,000 or so.

So I got a certain percentage back. I guess the best way to say it is 11 cents on the dollar. Years later. If the bankruptcy process recovers more than 11 cents on that claim, then the buyer of the Kannegundla claim pockets the difference and makes a profit. Let's say the 174,000 I lost on FTX are recovered in 10 years, right? I will not regret. Zero regrets it because Kannegundla has a different strategy. I wanted to get the cash from the bankruptcy claim primarily to invest in cryptocurrency again, I felt like I had a good chance of making money in the next five to 10 years.

So mine is always a long-term perspective. For other FTX customers, it's a waiting game. And as time goes on, the highly specialized investigators working around the clock on the FTX bankruptcy bill by the hour. The interesting thing about this bankruptcy is that it has an incredible window into vivid details about every penny each consultant earns, from the $1,300 per hour that John Ray charges to the average $1,800 per hour that Sullivan and Cromwell charge. Seven months after the FTX bankruptcy case. The retained professionals have already requested more than $200 million in fees according to the report of a court-appointed fee examiner.

That's almost $1.5 million a day; The report says that the fees are notable, but so is the performance of the professional. The company named in the examiner's report declined our request for comment. The really worrying thing is that all lawyers must get paid in bankruptcy before we get paid. Because the number of professionals involved and the hours they work change over time, it is impossible to estimate how much bankruptcy fees will ultimately cost FTX clients. The real winners in all of this will be the lawyers who worked on the bankruptcy. It's not just the real winners. They will be the only winners.

So far, none of the customers we spoke to have received their money from FTX and you might be surprised to know that this whole experience hasn't shaken their faith in cryptocurrencies. I think overall, cryptocurrencies should be here to stay. I believe that, and that hasn't affected my faith in the underlying asset itself. I want everyone to understand that the mistake here was not Bitcoin. The mistake here was not the cryptography. The mistake was a bad actor, SBF, who is really to blame for all of this, and the fundamental reason why we buy Bitcoin, why we use Bitcoin has not changed.

I would encourage people to continue investing in cryptocurrencies. Would I encourage them like I did before? No, I would probably give them some different advice right now and say, "Hey, you know, this is what I learned. Don't make the state mistakes that I made." Sam Bankman-Fried has been willing to admit that he, too, has made some mistakes. I have made many mistakes or they are things that I would give anything to be able to do again. I never tried to commit fraud with anyone. Although Bankman-Fried's version of the story is hard for FTX customers to believe.

Were you honest with us today? I was as honest as you know, I'm knowledgeable, there's some things I wish I knew more about, but yeah, I was. The question of whether or not Bankman-Fried violated the law is now up to the courts to decide. Bankman-Fried pleaded not guilty to all charges. I don't see how all the evidence that has now been openly exposed against him could be interpreted in any way other than that he committed financial crimes. We asked those most affected by the FTX collapse. If you have a message for Bankman-Fried. I have nothing to say to Sam.

You are welcome. I am disappointed by the betrayal of trust. I am disappointed by the lack of understanding of the need for integrity. I don't know if he would get through to him, but I think the worst thing he has done is the suffering he has caused to millions of victims around the world. I would say to Sam, I mean, it's great that you at least say in the media that you want to make sure all the customers are okay, I guess then do the right thing. I mean, serve your time, pay your penalties, and do the best you can for your users.

My biggest advice to him is to find out what you can do to help all those people who lost their life savings on FTX. I don't know how you're going to do it or what you're going to do to do it. If I had the chance to confront Sam face to face, I'd honestly be curious to know what he was really trying to do. For example, were you trying to do good or were you just a really bad person and marketed yourself really well to scam a bunch of people? Just give me an honest answer. (dramatic music)