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FTX chief Sam Bankman-Fried says he ‘screwed up’ but rejects fraud claim

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“Look, I screwed up,” the fallen crypto billionaire Sam Bankman-Fried told a conference in New York on Wednesday, but he maintained he “didn’t ever try to commit fraud” and was “shocked” by the collapse of his businesses.

With glassy eyes, at times visibly shaking, Bankman-Fried appeared via video conference from a nondescript room in the Bahamas. He told the New York Times DealBook summit he was “deeply sorry about what happened” but consistently said he did not have a full picture of what was going on within the various branches of FTX, his now bankrupt cryptocurrency exchange, and its offshoots.

Bankman-Fried resigned as head of the FTX cryptocurrency exchange when it declared bankruptcy earlier this month. The true fallout of the collapse is still emerging. FTX owes $3.1bn (£2.57bn) to its largest creditors, assets have disappeared, law enforcement and regulators are circling and Bankman-Fried’s free-handed largesse to the US political elite is set to cause a firestorm in Washington.

In another interview, broadcast on Thursday morning, Bankman-Fried told ABC: “I wasn’t spending any time or effort trying to manage risk on FTX.” He “stopped working as hard for a bit” before the firm’s implosion, he said.

One key question about the collapse is whether FTX’s customers’ funds were misappropriated and given to FTX’s hedge fund Alameda Research. Questioned by New York Times columnist Andrew Ross Sorkin, the 30-year-old appeared to shift blame to Alameda.

“I didn’t knowingly commingle funds,” he said. “I was frankly surprised by how big Alameda’s position was.”

Asked if he had behaved like a bank teller who took the cash from the till home in the evening, Bankman-Fried said: “Look, I wasn’t running Alameda, and I didn’t know exactly what was going on, and the size of their position.”

Alameda’s chief executive, Caroline Ellison, had reportedly been in a relationship with Bankman-Fried.

“Look, I’ve had a bad month. This is not great,” he told the audience, to laughter. “What matters here is all the customers and stakeholders that got hurt and to help them out. What happens to me is not the important part.”

In earlier interviews at the conference, some of finance’s biggest players weighed in on the scandal. Larry Fink, chief executive of BlackRock, the world’s largest asset manager, said it appeared FTX’s collapse was the result of not just mismanagement but bad behavior. Fink hinted that his firm, which had $24m (£20m) invested in FTX, may have been given misleading information.

“Right now, we can make all the judgment calls that it looks like there was some misbehavior of major consequence,” he told the conference. “Could we have been misled? Until we have more facts, I will not speculate.”

The treasury secretary, Janet Yellen, said the FTX collapse was a “Lehman moment” for the crypto industry and described cryptocurrencies as “very risky assets”.

Bankman-Fried was interviewed by ABC’s George Stephanopoulos at his home in the Bahamas this week. In the interview, the former chief executive was asked about his risk management at FTX.

“I think that there is something maybe even deeper wrong there, which was I wasn’t even trying, like, I wasn’t spending any time or effort trying to manage risk on FTX,” Bankman-Fried said.

“If I had been spending an hour a day thinking about risk management on FTX I don’t think that would have happened. I think I stopped working as hard for a bit, and honestly, if I look back on myself, I think I got a little cocky – I mean, more than a little bit – and I think part of me like felt like we’d made it.”

Asked if he was worried about going to jail, Bankman-Friend said: “There are a lot of things that are worrying me right now. As best as possible, I’m trying to focus on what I can do, going forward, to be helpful, and, you know, let whatever regulatory and legal processes are happening play out as they will.”

His appearance at the DealBook summit came after he gave a series of discursive and sometimes nonsensical explanations for the circumstances of FTX’s collapse, including blaming “poor internal labeling” of accounts for the company’s $8bn (£6bn) shortfall in assets.

Last week, Bankman-Fried was dropped by the leading US law firm Paul, Weiss after lawyers for FTX claimed he was disrupting its bankruptcy reorganization efforts through “incessant and disruptive tweeting”.

On stage, he acknowledged his lawyers “were very much not” suggesting it was a good idea to be speaking at the conference.

Bankman-Fried, whose personal fortune was estimated at $26bn (£21bn) at its peak, said he had about $100,000 (£83,000) to his name. Asked if he had been truthful in the interview, he said: “I was as truthful as I’m knowledgeable to be.”

The US Senate agriculture committee has scheduled a hearing for Thursday on “Lessons Learned from the FTX Collapse” with commodity futures trading commission chair Rostin Behnam scheduled to appear as a witness.

That will be followed, on 16 December, by hearings by the House financial services committee. It has said it expects Bankman-Fried to appear.


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Transactions involving Bernard Arnault investigated over suspected money laundering

The Paris public prosecutor’s office is investigating financial transactions allegedly involving the French billionaire Bernard Arnault and a Russian businessman.

The prosecutors are investigating transactions involving Arnault, whose ownership of the luxury goods group LVMH has made him the world’s second richest person after Elon Musk, and Nikolai Sarkisov, Reuters reported, citing a statement from the Paris prosecutor’s office. Sarkisov’s brother, Sergei, founded the Russian insurance company Reso-Garantia.

The French newspaper Le Monde first reported the existence of the investigation, citing transactions involving property at the Courchevel ski resort. It cited a December 2022 document from Tracfin, part of France’s justice system focused on combating money laundering, which reportedly lists transactions “which may characterise money laundering”.

A spokesperson forReso-Garantia said that “neither Reso-Garantia, nor Mr Sarkisov personally, has been involved in the transaction that was described in the Le Monde article. Mr Sarkisov and Mr Arnault have never met.”

The spokesperson said Sarkisov and Reso-Garantiahad received no contact or requests for documents from French authorities, or those of other countries.

Arnault’s fortune is estimated to be worth $164bn (£134bn), according to Bloomberg, and it at one point it made him the world’s richest man on paper. He and his family own 41% of LVMH, the group that owns luxury brands including the handbag brand Louis Vuitton, Moët champagne, Hennessy cognac, the jeweller Tiffany’s and the watchmaker Tag Heuer, among many others.

Arnault, who is 74, is preparing to hand on his empire, which he founded 35 years ago and grew by acquiring some of the world’s best-known fashion brands and expanding sales to aspiring consumers in Asia in particular. In January, he appointed his daughter, Delphine, to run Christian Dior, the second-biggest brand in LVMH in a move that some analysts said set the scene for a family race with her brother, Antoine, over who would run the company.

The Paris investigation is reportedly looking at transactions involving the purchase of 14 properties in the French Alpine resort of Courchevel during a period of a few weeks in the autumn of 2018, according to Le Monde. The properties were reportedly located in Jardin Alpin, a particularly exclusive quarter of the ski resort characterised by expensive restaurants with views of the slopes.

Le Monde reported on Thursday that Sarkisov had acquired real estate at a luxury Alpine resort via a transaction in which Arnault, through one of his companies, had provided a loan.

The spokesperson for Reso-Garantia said: “The transaction was managed by a small investment unit which invests professionally in European real estate. It consisted of acquiring flats in an old building in Courchevel from various private owners, with the view to sell them later to a developer once the entire building was bought out.

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“All transactions were carried out by French companies, through French notaries by French lawyers on all sides. This was a usual real estate deal.”

LVMH declined to comment.

Le Monde cited a person close to Arnault as saying the transaction had been carried out in full respect of French law.

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No need to send it back: Netflix posts its final DVDs to customers



Most of Netflix’s 238 million streaming customers around the world will be unaware that the company first launched 25 years ago as a DVD mailing service. Even fewer might realise that operation has continued, with under 1 million people still subscribing.

But now the company is finally hitting the stop button, with its five remaining US distribution centres mailing out their final discs to American customers on Friday.

These DVD diehards will be allowed to keep these titles rather than return them, meaning some will get up to 10 as a goodbye present from a business that boasted as many as 16 million subscribers at its peak.

“It is very bittersweet,” Marc Randolph, Netflix’s co-founder and the chief executive when the company shipped its first DVD, told Associated Press. “We knew this day was coming, but the miraculous thing is that it didn’t come 15 years ago.”

Netflix does not break out the number of DVD subscribers in its figures, but according to an AP estimate fewer than 1 million people now subscribe to the service.

Randolph came up with the idea of a DVD-by-post service in 1997 – in a challenge to then rental market leader Blockbuster – with his friend and fellow entrepreneur, Reed Hastings, who eventually succeeded Randolph as CEO. He only stepped aside from that role this year.

The first disc sent out by Netflix was Tim Burton’s Beetlejuice in March 1998 and since then the company has shipped 5.2bn of them. Its most popular title was the Sandra Bullock vehicle The Blind Side.

However, Randolph said he knew that DVDs would not be the mainstay of the business and would be overtaken by watching films and TV shows through internet connections.

In 2011 Netflix decided to separate the DVD business from the streaming business, one year after Blockbuster went bankrupt – having turned down an opportunity in 2000 to buy Netflix for $50m (£41m) instead of trying to compete against it. The streaming giant is now worth about $166bn.

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“From day one, we knew DVDs would go away, that this was transitory step,” Randolph said. “And the DVD service did that job miraculously well. It was like an unsung booster rocket that got Netflix into orbit and then dropped back to Earth after 25 years. That’s pretty impressive.”

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Evergrande halts share trading as woes mount for China property giant

Embattled Chinese property giant Evergrande has suspended share trading on the Hong Kong stock exchange only a month after it resumed trading after a 17-month suspension.

Trading in its two other units – the property services and electric vehicle groups – also stopped at 9am on Thursday, according to notices posted by the stock exchange.

The halt in trading comes a day after reports that the chair of Evergrande had been put under police surveillance. Hui Ka Yan, who founded Evergrande in 1996, was taken away earlier this month and is being monitored at a designated location, according to Bloomberg.

It is not clear why Hui might have been placed under residential surveillance, which falls short of a formal detention or police arrest and does not mean a criminal charge follows.

Evergrande had only resumed trading on 28 August after the company was suspended for 17 months for not publishing its financial results. Earlier this month, several employees of Evergrande’s wealth management unit were arrested in Shenzhen on unspecified charges.

Two former executives were also reportedly detained recently. Pan Darong and Xia Haijun had resigned last year after it emerged that 13.4bn yuan (£1.5bn) of deposits had been used as security for third-party loans.

Earlier this week, Hengda Real Estate, Evergrande’s primary unit in mainland China, missed principal and interest payments on a 4bn yuan bond. Hui resigned from his position as Hengda chair in 2021.

On Sunday, Evergrande said it was unable to issue new debt as Hengda was being investigated.

And on Friday it said meetings planned this week on a key debt restructuring plan would not take place, adding it was “necessary to reassess the terms” of the plan in order to suit the “objective situation and the demand of the creditors”.

China’s property sector is a key pillar of growth – along with construction, it accounts for about a quarter of GDP – and has experienced a dazzling boom in recent decades.

The massive debt accrued by the industry’s biggest players has, however, been seen by Beijing in recent years as an unacceptable risk for the financial system and overall economic health.

Authorities have gradually tightened developers’ access to credit since 2020 and a wave of defaults has followed – notably that of Evergrande.

Another Chinese property giant, Country Garden, narrowly avoided default in recent months, after reporting a record loss and debts of more than $150bn.

Agence France-Presse contributed to this report

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