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Billionaire Founder of Coinbase Rejects Sam Bankman-Fried’s Account of Events, Says Funds Were ‘Stolen’

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Sam Bankman-Fried. Source: a video screenshot, New York Times / YouTube

Brian Armstrong, the CEO of major crypto exchange Coinbase has said that he believes Sam Bankman-Fried stole customer funds, which ultimately led to FTX’s demise early last month. This contrasts sharply with what Bankman-Fried has been arguing in a string of public interviews.

After laying low for a brief period, the former FTX CEO has conducted several interviews to explain what had happened to the exchange and the customer funds – but his explanations have drawn criticism from the crypto community, who see these as poor attempts at damage control.

Commenting on Bankman-Fried’s version of events that led to the fall of his exchange, Armstrong didn’t mince his words, stating that,

“It’s stolen customer money used in his hedge fund, plain and simple.”

The implication here is that the money was used to fill a hole in the balance sheet of FTX’s sister company, Alameda Research.

As a reminder, after reappearing in public, Bankman-Fried blamed bad accounting and “huge management failures” for the company’s failure and for $8 billion being moved from FTX to Alameda. The relationship between these two companies continues to be investigated.

In The New York Times interview, the former CEO stated that he “did not ever try to commit fraud on anyone”, that he “didn’t knowingly commingle funds”, that he “was frankly surprised by how big Alameda’s position was”, and that there was “a massive failure of oversight of risk management and of diffusion of responsibility from myself running FTX.”

Fortune reported on Sunday that Armstrong opined that it’s “baffling to me why [Bankman-Fried is] not in custody already.”

Meanwhile, some commenters called out Bankman-Fried for previously tweeting about other companies’ finances – notably, in this case, Coinabse’s earnings – instead of focusing on his own company’s accounting. 

FTX and Alameda are currently in bankruptcy proceedings, having filed the documents on November 11.

In late November, James Bromley, counsel to FTX’s new management, said during a bankruptcy hearing that a “substantial amount” of FTX’s assets are either missing or have been stolen.

Per Bromley, the former leadership exhibited an utter lack of professionalism in managing billions of dollars in users’ cryptoassets. “What we have here is a worldwide, international organization, but which was run as a personal fiefdom of Sam Bankman-Fried,” he claimed.

Soon after FTX filed for bankruptcy, the exchange took out a full-page ad in the Wall Street Journal, saying: “Trust Us.”


Learn more: 
Coinbase CEO Reveals Company Holds Over $39 Billion Worth of BTC In Response to Now-Deleted Binance CEO Tweet
Earnings Report: Coinbase Loses $545 Million in Third Quarter – Stock Plummets

Sam Bankman-Fried Loses $17 Billion Fortune, Now Down to Just $100,000 in the Bank
Sam Bankman-Fried Interviewed Live About the Collapse of FTX