Former FTX CEO Sam Bankman-Fried may have been arrested but he big plans, or at least he thinks that he does.
Bankman-Fried has expressed a desire to launch a new business in order to pay back customers of his now-bankrupt cryptocurrency exchange. FTX filed for bankruptcy last month after it was discovered that the company was likely fraudulently intertwined with trading firm Alameda Research; both were controlled by Bankman-Fried and a close-knit group of amateur executives.
In a recent interview with the BBC, Bankman-Fried said he would “give anything” to start a new venture and earn the funds necessary to compensate investors and customers. He added, “I’m going to be thinking about how we can help the world and if users haven’t gotten much back, I’m going to be thinking about what I can do for them.”
Officials at the Securities and Exchange Commission have launched a criminal investigation into Bankman-Fried to determine whether he broke the law by transferring FTX customer funds to Alameda Research. A hearing for the House Financial Services Committee is scheduled for Tuesday.
Bankman-Fried has generally insisted during multiple media interviews that his companies’ failure was due to his own incompetence rather than overt criminal behavior. When asked by the BBC if he is preparing for possible arrest and imprisonment, Bankman-Fried indicated that he is indeed concerned about such an outcome.
The situation at FTX highlights the need for increased regulation in the cryptocurrency sector. Members of the Senate Agriculture Committee recently held a hearing with Commodity Futures Trading Commission Chairman Rostin Behnam on increasing federal oversight of the industry.
The events at FTX show the potential dangers of allowing the sector to operate without sufficient oversight and protection for investors. It remains to be seen what the outcome of the criminal investigation and upcoming hearing will be, but it is clear that action needs to be taken to prevent similar situations from occurring in the future.