- A former CFTC enforcement attorney weighed in on Sam Bankman-Fried's "ill-advised public relations tour."
- The disgraced FTX founder said "fuck regulators" in an interview with a Vox reporter last month.
In the month leading up to his arrest, Sam Bankman-Fried went on a public apology tour — a slew of haphazard interviews filled with half-baked responses, a lot of contradictions, and at times, laced with profanities.
"I don't think I'll be arrested," the former FTX exec said during an interview hours before he was detained by the Bahamian government on Monday.
Bankman-Fried's crypto empire, once worth $32 billion, filed for bankruptcy protection last month, after a Coindesk report revealed that the once-beloved industry wunderkind's quant trading firm Alameda Research was being propped up by FTX's native FTT token.
"Never in my career have I seen such a complete failure of corporate controls," John Ray III, the attorney who handled Enron's bankruptcy process and stepped in as FTX's new chief exec, said in a court filing.
Since the downfall of FTX, the former crypto billionaire has given interviews to the New York Times, Bloomberg, Good Morning America, the Wall Street Journal, Forbes, Vox, and a slew of outlet others.
"Fuck regulators," Bankman-Fried notoriously told a Vox reporter on November 11. The disgraced founder chalked up "a lot" of his long-running spiel about effective altruism and ethics as a front. After the story went live, Bankman-Fried said he thought he was just talking to "a friend" and "stupidly forgot" they were also a journalist.
Typically, when someone is in the crosshairs of Securities and Exchange Commission, the Commodity Futures Trading Commission, and the US Department of Justice, speaking publicly about the matter at hand isn't always the best move.
In the weeks leading up to his arrest this week, Bankman-Fried didn't do himself (or his legal team) any favors with his media appearances, according to former CFTC senior trial attorney Braden Perry.
"The more he speaks, the more potential admissions he gives prosecutors," Perry, an expert in regulatory compliance and white collar defense, told Insider shortly before Bankman-Fried's arrest. "No matter how much he may want to justify certain things, it's detrimental to his potential legal defenses."
He added: "The 5th Amendment's right against self-incrimination is a powerful tool for individuals potentially facing criminal liability and at this point, his potential incarceration should be top of mind as opposed to his ill-advised public relations tour."
US prosecutors are accusing Bankman-Fried of carrying out a years-long scheme to defraud investors. FTX secured $1.1 billion from roughly 90 US-based investors in an "orchestrated scheme to defraud equity investors," according to an SEC complaint, which alleges he raised $1.8 billion total.
"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto," SEC Chair Gary Gensler said in a statement on Tuesday.
In the weeks leading up to his arrest, Perry says Bankman-Fried took an approach that would "distress any criminal defense attorney."
"It [was] an absolute mistake," Perry said, comparing the appearances to an "ill-advised public relations tour."
To top it off, the dethroned exec let a Bloomberg reporter spend more than eleven hours with him at his penthouse in the Bahamas, where he essentially admitted the company broke its own rules.
"He seems delusional, or committed to pretending this is still an error he can fix, and either way, the few supporters remaining at his penthouse seem unlikely to set him straight," the article reads.
Bankman-Fried said he's been given the "classic advice" by his lawyers to not "say anything" and just "recede into a hole," he said in a live interview with Andrew Ross Sorkin at the New York Time's DealBook Summit last month.
"I think I have a duty to talk to people," Bankman-Fried added. "I have a duty to explain what happened."