Yo, Simon, I've sent you through a cohost invite. You gotta accept the cohost invite, please.

Let me ping Sam.

So so so so.

That just being Sam, he's already told me in the DMS he's ready.

Alright, so it's too many requests to speak everyone. I'm going to have to bring them all down. Please don't request to speak unless you've been just crowds at all.

Unless you've.

Chatted to Romeo, the team. I just confirmed that you'll be joining the panel. If that hasn't happened, please don't request to speak until after the interview is done.

Check. Can you hear me fine?

You're coming in loud and clear.

Simon, I'm going to send you a course invite again.

Please accept it.

Yo-yo, Mario. Just letting you know that we're live. We got the YouTube stream ready. You guys are all on the stream. We're waiting for you guys.

Appreciate it bro.

I'm just gonna organize everything so this inviting.

We'll see if this space.

Will be Elon's one.

In terms of the record, I'm not sure. Hopefully it doesn't crash it.

I'm sure it will. I'm sure it will, actually. I'm pretty sure that Elon's going to join the space at some point.

I can't even see you right now.

On this stage.

There you go, already starting to glitch.

I will give it time.

Let me see what time is that.

Right.

He's trying to join. Let me send them the link.

I just sent the link to Sam.

There's a lot of reports of people not able to join.

So, standard glitch.

Hey everyone, what an exciting day.

Kim, how are you?

Very good. Hi, Sam, nice to see you.

Hey.

Sam is not here unless I can't see him. Ohh you are here.

Assist.

I just got here.

How are you?

Ohh, you know, it's been quite the month.

Bro, I message you uh hey you all good? And you're like, I'm. I'm stuck in traffic. I might be late, so I'm not sure what you're doing in traffic.

Let me get Simon. Simon, are you there? Can I? Maybe I can't see Simon.

No.

Alright, so as you can see.

I can't hear around either check. Can you hear me fine?

I can hear you fine, I think, Grandpa.

I'm here, Maria. I'm here, I'm here, and we're live.

I can hear you well.

Ohh cool. Yeah I can. I can hear fine. Yeah I can hear you fine. Alright. Just waiting for the Co host.

Uh.

All right. Just waiting to cohost salmon. We can kick it off. I've sent you an invite, Sam. You can hear me? Yeah, man, I've sent you an invite to.

Yep.

Not.

I'm gonna send it again to you, and then I'll kick off the show. So I'm just talking to Sam now. You're good. You're good. So I'm talking to Simon. Sorry. You're good, Sam. I can hear.

You're good, just inviting Simon. I've sent you the host invite again Simon chat. If you could try to bring up Simon while I give an intro to the show.

And kick it off. Uh, if you could try to bring up Simon in the meantime as a speaker and then I can go home and that would be great.

OK, I'm here now.

Alright everyone, thank you for joining. For anyone that doesn't know, my name is Mario Norful.

We do this space and whenever there's major news, breaking news and major events we've had, you know we did marathon spaces when.

FTX imploded and we've had guests from Elon Musk to Mick Mulvaney, we had C Hunter Biden, bunch of regulators. So everyone came into the space and we broke down the events live on stage and had a lot of people within the company outside the company and come in and comment on the events life. So it was a.

Pretty, pretty crazy times. And here we are again today with Sam.

Sam, I'm going to kick it off with the questions. You ready?

Go for it.

Alright, so the first question is, is pretty general and.

I think you've been asked this before as well. What's the intention of doing these interviews?

Is it me or is he choppy the chat?

I thought I I've lost his connection as well.

I I mean I think at the end of the day like I feel like, I I mean you guys all deserve to hear from me about what happened and and I want to be able to to say it.

Yeah, yeah. So Sam, you're a bit choppy with friends, so you gotta just fix the Internet somehow.

If you don't mind.

Can you hear me? Yeah, no worries.

Sorry, give me one second here, just.

All right, there we go. Can you hear me now?

Yeah, sorry, Sir.

Yeah, yeah. Alright, so the question again, the intention of doing this interview.

Yeah, I think, you know, at the end of the day, like, it's, you know, I feel like you all deserve to hear from me about what happened. I feel incredibly bad about it and I feel like.

I don't know if that's the least that I can do.

Alright so the first question I have and I know chat has got a lot of questions as usual, but the first question is.

You know.

There were many other executives around you and I won't name anyone.

And they've been pretty silent throughout all this. So my question to you is how involved were they in making those major decisions?

I mean to some extent I think that there was.

I mean, there was a pretty big diffusion of responsibility and I mean, I feel.

We're losing the connection.

No, Sam, you're, you're, you're you're you're choppy. You're choppy again. You're choppy again. I'm not sure why.

I feel incredibly bad about what happened. I feel bad about everything and I think that sorry about.

Yeah, sorry about that. You should.

Maybe go somewhere with a with a better Internet connection?

Yeah, did you have do you have a different connect?

Huh.

OK.

It's it's not the Internet connection it is it is not that but but anyway it should be good for now. So yeah. And I think like at the end of the day look I was I was CEO of FTX and like that means that one way or another like what happens is my responsibility and.

And you know, I'm. I'm the one person who doesn't get to say that whatever that wasn't sort of like you know, that wasn't in my realm. That wasn't something that I was chiefly responsible for. That's something that other people were thinking about. Like I I shouldn't get to say that. And I did massively screw up in I I wasn't on top of shit. I wasn't on top of some of the most important things that I should have been. That's that's on me and you know I.

I don't think, I think no one was really on top of, you know, international position risk risk management and I, you know, a lot of people could have been, but I was the person who should have been responsible for making sure that someone was.

How, how, how involved were you on the Alameda side versus the CEO and Co CEO at that company?

I haven't really been involved in Alameda for a number of years and I and I get like you know periodic high level you know summaries from them on some of what was going on. But I haven't been making trading decisions there. I have been making day-to-day decisions there. You know I hadn't been paying much attention to it and and and part of the reason that I had been paying so little attention to it was out of you know frankly out of a concern about about conflicts of interest.

I have a follow up question on on that if I may.

And we will, yeah, if we do, if we don't. So Kim, the the way we structured it is. So we've got a list of questions me and check that we're prepared and then we'll give the, the, the mic to the to the rest of the stage to ask follow up questions.

I understand ohh off.

Yeah, it's just important that there's context here to what he's just said. So if you don't mind you you you told me that I can ask the first question, so.

First question, when we move the MIC to the panel, so you'll be the first one. Ask question after after we're done with the line of question, if you don't mind.

Yeah, but he said something that is quite important that I think is relevant to, uh, catch up on if I may.

Very good.

I'll let you just add this comment please and I will go through the line of questioning please Kim and just keep it short if you don't mind, please.

I appreciate it. So Caroline Allison, the former CEO of Alameda Research says that you knew that FTX customer deposits were misused against your own terms of service and then you stated in several interviews.

Without much confidence, I may add that you didn't know. And by saying that you are basically throwing Caroline under the bus, because if you didn't know, then she must be the culprit who's legally responsible.

You're dropping out, Kim.

And then?

For 1,000,000 or billions of missing stride and it's Caroline had a romantic relationship. So my take from that is that you had power over her and that she did what you asked her to. So my two would anyone believe. Yeah. Why would anyone believe anything you say when you're throwing your own lover under the bus and then.

I was talking.

I'll let you, I'll let you. Please come if you can get to the question. So we can go through the line of question if you don't mind, please.

Caroline is here and listening right now, so is there anything you would like to say to her?

I'm.

Deeply. I mean, look, I I fucked up big, but I'm pretty offended by some parts of that, like.

Ain't trying. I had been together for a while. I don't control her. I never did. I think it's really fucked that you would say that I would. That that that's how things work.

And.

You know, putting that aside for a second like.

People.

I wasn't super involved in Alameda. I was not involved at all in the trading. I hadn't been for years. I was intentionally not getting involved in it because I was concerned about a conflict for interest. But you know, as to.

Right.

You know, like I I I guess I'm not entirely sure what the question was. There's there's sort of a.

I will go back. We'll go back to the line of questioning. Check, I'll give you the mic cause I know that was one of your questions as well. Check, go ahead.

Yeah. So SF, thank you for coming here today. We're a customer assets ever backed one to one at FTX.

So FTX, it's a margin trading platform, it's a derivatives platform. So like everyone was depositing collateral, you know, putting on positions, long positions, short positions, positions, you know, futures positions, Burrows, you know the, the, the, the collateral that FTX held was equal to the sum of those customer positions. But there are both positive and negative numbers there and so you know.

Well, what does that mean? What does that?

So, well, what it means is that if you as a customer, you know, if you deposit $1000 and then, you know, withdraw one one thousandth of of a Bitcoin.

From the exchange or you know use that to sell Bitcoin or something like that, you've put on a merchant position there or or you know or to do it with the the coin futures position and you know, you like you know many of the customers had negative balances in in assets. That's sort of how the platform functioned.

I and the court.

What? No but but. OK, OK, but my question is if I deposited Bitcoin into FT X and intended to trade with it on the exchange.

Um, or or use it in the drives, whatever it would be.

Would I be able to withdraw that at all times one to one?

So.

The way that, I mean the the way it worked again everyone had deposited collateral and people were borrowing and lending from each other on the platform those assets and withdrawing them. But it should have been the case that you know we could have liquidated any of those positions that we could have margin called them and sold them off to regenerate whatever they were short.

But was it ever the case? Was it ever the case that there was a 1 to 1 backing of assets that FTX to where, let's say 2018-2019, was there ever a point in time where there was an actual 1 to 1 backing in the custodial portion of FTX?

How was that insured?

So it was always the case this if you include the the negative positions of that that you have positives and you have.

Yeah, sorry, sorry.

OK, you, you you broke up. You broke you. We lost your connection after you said it was always the case.

You're breaking up again, Sam.

Sam either.

Damn it.

Let me ping him.

He's rigging the space just like he rigged his customers.

Can you can you see the?

Yeah, yeah. Sorry so.

Can you see him?

Hello.

Check on our perfect you're you're back.

Uh, yes, still there. OK, we can hear you again.

Is your connection fixed now?

Yeah, sorry, uh, yeah. It's not a connection thing. It's when my phone gets a notification that it cuts out for a second.

OK, can you please put your phone in do not disturb?

Ohh yeah, that's a good idea.

OK do you wanna do you wanna yeah uh, if you can, yeah put it does not disturb or turn off notification would be good.

Alright, give me a second.

Uh.

Yep.

All right.

And just a reminder for panelists, if you don't mind, we'll open up the mic for the panelists after the questions. Please go ahead, Sam.

Cool. Sorry, that's a good idea. Alright, it's in, do you not?

OK, so you were, you were you were telling us that it was always the case.

Well that it was always the case that you know, the customer balance is you know were equal to the the assets as long as you count the negatives as well as the positives that if you you know add up all of the customer balances positive and negative, but those were equal you know to the assets that that FX had. The problem is that there are both positives and negatives there which is the nature of margin trading, but it should have been the case.

That at the end of the day we could have margin called any of those accounts and been able to to liquidate them in time.

You you did have auto liquidation procedures in place for many accounts FTX, correct that that was actually part of the system internally?

That, that, that is correct. That is correct.

And um, but OK, I'll get to that a little bit later because there's a little bit deeper dive on that. When did it stop being the case that customer assets were actually backed one to one?

Well, it never stopped being the case.

Well, it has to have stopped being the case. If people can't withdraw their money, then it's not 1 to one.

It never stopped being the case in the context of the fact that there were both positive and negative balances on the exchange and that if you added all of those up, it added up to the same set of assets. But because they're negative balances, because there are people with borrowers, there are people who are short.

That meant that the total amount of assets was not the same as the gross sum of all of the long positions put together. Which meant that in order to be able to allow, you know, everyone to withdraw all assets from the venue, you would have to settle all contracts and close down all open positions and all open margin positions that anyone had. That's the nature of a merchant training exchange. But you know to the that that second point.

There's obviously a really big failure there of risk management and that's on me.

Yep.

And you said that FTX is what you know you paid the most attention to, um, so much so that you claim you couldn't track alameda's compliance properly. Surely though you had the time to be checking, you know, on the balance sheet of the company you were Blazer focused on, right, like watching the statistics on trading revenues could not have been taking up so much of your day that you didn't have the ability to oversee compliance and use their funds.

So I'm not sure what you mean by compliance in context there, but.

Compliance to legal laws, fiduciary responsibilities, risk management.

I I sure. So, I mean, I think that like I first of all, I absolutely could have and deeply wished that I had.

I paid a lot more attention to risk management. Like that was a deep failing and it was a really embarrassing mistake for me to have made. And I think it was a result in part of me getting a bit less grounded and of of, you know, me starting to get distracted from all of the details of the company. There are still some eyes paying a lot of attention to, but not as many as could have been. And you know, I was paying too much attention to.

Higher level things to long term strategic goals rather than, you know, spending as much energy as they should have, as I absolutely should have on data, but.

I've, I've got, I've got a quick, quick.

Alright.

And and and you've, you've you've stated that the markets plunging were a large part of why FTX had to shutter its door. That sets essentially one of the reasons you gave two reasons right and one of the big reasons is you said the markets plunged. But if the funds are backed one to one changes in the market prices versus the dollar have zero impact on being able to withdraw funds. If it's set up properly, it just needs the dollar it just means the dollar value of those funds has changed correct

Failure.

OK.

I think that's not actually how a derivatives exchange works. On a derivatives exchange like and you can look at the clawbacks that a lot of exchanges had back in 2018, the the really frequent clawbacks. And the core problem that was going on there was in order for, you know, everyone to be able to realize what they think they have, you need to be able to close down all positions on the venue such that no accounts end up net negative. So you need to be able to take every single account, in theor

And all marginal futures positions such that there are no negative numbers or positions or balances anywhere and do that and and if you have a long position if if some user has a long position on the exchange and markets start crashing.

At some point, that position is going to be underwater, and at the point where that position is underwater, that means you aren't going to be able to close it down while still leaving that account with a positive balance. It'll have a negative balance.

But it shouldn't be able, it shouldn't be able in a properly managed environment for it to go underwater, right? Essentially, because if we're to look at your terms of service, which says that you can't loan out user funds, it shouldn't be possible for those user funds to end up basically being loaned out to those margins.

So that was one piece of the terms of service, but there are many pieces of the terms of service concerning are there other parts of the exchange including the?

Yes, that doesn't change that part of the terms of service. One, the fact that there are other parts of the terms of service doesn't change the paragraph, the terms of service, it says you can't lend out the depositors funds to FTX trading. FX trading could not move them to be traded. And now granted when you spoke with Fox or the reporter at Fox over there, you seemed to indicate that in fact you know funds were lended out from FTX, from FTX. Alameda and Alameda then made the trades and therefo

That's why you're able to kind of make the statement that FTX wasn't doing an investments here.

So the terms parts of the terms of service are overridden by other parts of the terms of service. Well, it was the case that I don't know if that was part of the I I don't know exactly which part you're going up.

So was it your intention to use user funds, customer funds to lend out to others on the platform without their consent?

So.

If you imagine any futures position that a customer had on on the platform.

That is a situation where in order for, you know one side that has a position on to be able to be made whole.

OK.

It has to be the case that the other side is able to close down their position that those you know Mark to market gains that they have are conditional and that they're credited with on the platform are conditional on you know, us being able to liquidate the other side of that futures contract without that account going under. The same is true of all spot margin positions on the platform and that you know was spelled out in the terms of service if you read the full terms of service and so.

There's that piece of it. There's a lot of other things going on as well. And so I I don't want to say that that was the only thing that went wrong. It wasn't. There were, but.

OK. We'll go, we'll go deeper into that a little bit later. You were the majority stakeholder by a wide margin and FTX and Allen?

Yep.

Go for it, Mariam.

Before before I've just got to. I've just got two quick questions. Um, chat. Also. I've just got another panelist chat who could be jumping in. I've given him right to jump in to comment on a few points. If he jumps in, his account is real 0 sum Sam. My question is, was Alameda allowed to remove assets from FTX and is that how they paid back Genesis and others who demanded to close their loans?

So on.

I all users were to some extent allowed to remove assets from FT X in that you know they could deposit funds to FT X, they could withdraw and they could even withdraw more than they had of some assets as long as it was over collateralized by other assets. So that piece was in theory not specific to to to to one firm and was you know rather a a feature of how the platform.

Worked that I that that's how margin trading works. It's it's you know how I collateralized but not fully funded positions work on platforms. That being said.

Obviously, like something really bad happened and that something was that that position got way too big. And you know, I vastly underestimated the scale of what a market crash could look like there.

Yep.

Check.

Chip.

OK. Well, we'll we'll get into that piece of that and just uh, we'll get into that piece in just a second, uh, after a few more questions. Are you, are you still the owner of Alameda right now?

I mean, there's a definitional issue given what you think of the Chapter 11 process. I I was a large owner of it prior to that.

And how much of a stake did you own it?

I.

Check before we go down that road can I just get some clarity on the on the loan book thing because I've got a message here from an owner of an exchange and he says the following. He says the way margin trading works is via the loan book that where people explicitly put their funds to be available for others to borrow for the specific rate for people that didn't put their funds in the loan book. All those assets should have always been backed one to one and never touched. So it's I mean it's a c

To be lent out, you would have had to have my specific permission. I would have had to put it out there to be available for people to borrow against when they take a position, right?

So I totally hear you on that. There were billions of dollars in the barrel lending book. On top of that there are billions of dollars of open interest on futures contracts, which is another place where in order for that to be able to settle successfully, it needs to be the case that I that you have.

You know, you basically need to have you know ever and be able to be liquidated there in time.

So.

And so that's another source where this came from. There were some amount of lines of credit given to some firms on the venue and then there were some other effects on top of that that when stacked together created a position that was larger than it should have been, larger than I thought it was, larger than I should have allowed it to become and and represented a real failure of oversight and management.

Yep.

Sam, are you saying that there were people that had their collateral not on the platform and they were trading against collateral that was not actually even in the system? Because if the plan, if the collateral was on the system, then to liquidate the collateral should have been automatic, but if the collateral was out of the system, so if you're saying Alameda for example, or others had collateral but the collateral was not in FX, there, isn't that a breach of the terms of service?

What happened to that collateral?

Ohh, they did have collateral on FTX unfortunately and I say unfortunately but this was a huge mistake of mine as well because I should have anticipated you know the prospect of this and should not have allowed things. But well it decreased quite a bit in value and so you look at it decreased by I think some you know many billions of dollars in value over a two day period starting on on November.

6th.

So the.

OK. And and yeah, go ahead, Ryan, go ahead. I'll shoot. I'll take that and I'll go.

So, so, so you're saying that the collateral went down so quickly that you didn't have time to liquidate the position quickly enough to be able to get the the borrower side and the land side into equilibrium?

Yeah.

Yeah, I can, I can probably share it. I could probably throw some like a little bit here as well. The way that that obviously works is on an LTV ratio. So when building out like the product, the risk management margin system for this runs off in a loan to value ratio. So that's how they're deciding on when collateral needs to be put back into the system to to bring it back up and and to meet that unfortunately the mix between a bank run at the same time as a a massive drop within what the people

As collateral, some of them had FT token for example. And when we saw the drop in that they're unable to meet the LTV requirements. So there is actually nothing there to to liquidate, right. In terms of collateral, the actual lenders themselves needed to provide more collateral into the system and because of what they were providing as collateral had dropped in value, this becomes a a massive waterfall effect. So this isn't just an FTX product problem, I mean the risk management.

The system on FTX is great. I mean clawbacks on derivatives was very tough thing to tackle. I think FTX did that very well. This is a a bit of a, I guess an oversight on the counterparty risk to FTX, not just FTX itself in this matter.

Yeah.

If Sam could probably correct that like that, that's obviously there's more factors than just the the management on FTX's side. There's a counterparty issue here as well in which what they had collateralised their instruments on FTX against.

Earlier.

Exit.

You said.

Yeah. Everything you said there is correct. And it was absolutely a failure of counterparty management. It was a failure of oversight of the account. It was a failure of management responsibility and it was a failure of understanding or even frankly thinking that hard about what a real downside scenario there would would look like. Because you know what he says. Yeah.

Can can I just? Can I add to this 6?

Yeah.

Yeah, hold on, hold on, hold on. Zero sum. I appreciate if I'm able to continue my line of questioning that I've worked multiple hours on.

And before, before you do chat, just for speakers, just please, uh, please mute after you speak just to avoid background noise because I can't mute you at the moment my space is glitching.

OK. So Sam.

Yep.

Yep.

You said that you fucked up, right? And you got the numbers wrong by magnitudes of billions of dollars in regards to alameda's balances on FX right now. While we can all make mistakes, right? As a graduate of MIT that seems highly improbable. So how precisely I think you know, I think you need to explain this quite in detail to our audience. How precisely did you mess up a calculation that far in a way that happened to massively benefit Alameda and FTX's balance sheets in a fraudulent manner?

I'm gonna answer the question is if there weren't a few of those words in it, but I, you know, basically, and I should cash out this by saying that I unfortunately don't have access to most of the data right now. I've, you know, lost access to a number of the systems. And so because of that this is all piercing together, you know, from my recollection, from the, you know, pieces of data I have been able to find from the analysis I did in the days shortly after the crash.

So these are all going to be approximate answers and and I apologize for that, I don't I don't have the exact ones but but the.

Well, you referenced you referenced an accounting quirk, correct? And what is that?

Yes, that's right. So Yep. So yeah, So what happened there was the following and I think there are some tweets you know about this that that serves reference this fact you scroll back to to 2019 when FTX was first founded and at that time we were trying to get bank accounts for FTX. We we couldn't, we eventually did you know a few years later.

But you know 2019-2020 we couldn't get bank accounts that could take customer deposits for for FTX. We obviously were operating crypto wallets and you know I had crypto deposits and withdrawals. But some customers you know generally once that had in many cases sort of like I pursuing relationships OTC with Alameda, would I wire money to I to Alameda research asking to be credited.

To their FTS account and they they wire it straight Alameda and then we would do a Ledger transfer on FTX affectively from Alameda.

To that to whoever sent that wire transfer in order to credit them.

Over the last few years we transitioned away from that system because you know over the last few years we were FX was was able to get its own bank accounts and its own name and you know straightforwardly take customer deposits through that.

There was, you know, there are legal documents drawn up around that payment service relationship. I didn't know the details of foods and there was an accounting system built out for it that I I know the details of my understanding.

Who built out the accounting system?

And it's a set of developers. It's I, I, I.

At your direction or or someone else's direction.

Um.

Why not?

I honestly don't remember. It was three years ago and 3 1/2 years ago. And you know, I I think that I was probably involved in some very high level discussions around it, but I don't remember like you know, and I don't know if I ever knew exactly who was involved in making exactly those decisions.

Yeah.

Yep.

Do you mind if I just asked the question? You mentioned that people were depositing money into Alameda, and then Alameda was doing a Ledger transfer to FX. Isn't that highly illegal though? Specifically, in an exchange environment, isn't it illegal for a related party to act as a middleman between a customer and A and an exchange?

I.

Thanks. So good. Can you point to in what way sorry all these it can be done in a poor manner like you you could implement it in a way which is not OK and and I think it should be disclosed which it was disclosed and and.

So what was alameda's? What? What was alameda's role? What was Alameda acting as? If I was putting money into Alameda, and that money was appearing on the FTX exchange as a credit in my account, what was alameda's role in that, in that structure?

They had bank accounts.

Because they would need to have that would have that would need to have a money transmitting license or a broker dealer license or something if they were accepting money from a customer that was then landing up on an exchange, no.

None of this was on FTX us. And by the way, FTX USA to my knowledge is fully solvent, fully funded. There's nothing strange that happened there to my knowledge and I think should be returning all customer funds and should be opening up withdrawals, so.

Why did you file it for bankruptcy then?

I'm an idiot. I don't know. I was given poor information by lures. I was pressured very heavily to do so by people I no longer believe were acting in the interest of customers. It was 4:30 AM. I was extremely exhausted. Being hounded by many people. I made yet another really poor judgment call.

Before, before, before we go to the bankruptcy.

Who? Who all was there at that meeting? Who all who? Hold on, hold on a second, Mario. This is an important question. Who all was there at that meet?

I I was speaking with legal counsel at the time.

Were your parents present at that meeting as well?

I actually don't know if I'm even allowed supposed to say who is there, but.

The first day that will be actually bankruptcy. Declarations seem to say that that was actually the case. At 4:30 AM, you finally resigned with your parents. They're convened with the lawyers and the parents.

And so, so, so why why are you hesitant to mention the fact that your parents were present to that meeting?

But I mean.

You.

I'm in general hesitant because of there are limits to what you can say about some conversations that involve legal, legal counsel. And so I was, I was just being as an of an abundance of caution there. But if there's an importance here that that you want to dive into, I'm happy to do it.

Yep.

Well, no, I'm just, I'm just interested here. I mean, I mean you you said you, you're not really interested in taking your legal counsel right now. Who's representing you right now at this stage?

So I do have legal counsel right now. I I have new legal counsel. And you know, I.

OK, how are you paying for them?

You said.

Yep.

Yep.

I need to ask one question before we're moving on to a topic on one more question about the Alameda getting the funds. So just quickly check and I'll give you the mic back for the line of questioning. So the dollars, Sam, that were sent to Alameda because FTS didn't have a bank account, so they were used by Alameda like it's their own money when they were really customer assets all along. And Caroline, you, is that correct?

Sorry.

I I can't can't can I kind of extend on this question Sam Imrik.

No, because the question wasn't asked to you. This question was asked the same.

Please no.

No, no, I said let him, let him, let him let real 0 sum brought OK as a 0 sum extent quickly to that question and then I'll let Sam answer.

Yeah, I just just kind of just to extend on the little bit in regards to the funds that Alameda was, you know, obviously we saw Brett and we saw Sam leave from obviously FTX US and also Alameda sometime last year, which kind of leads to a, I guess the highlight a point that something went wrong back then. What position do you know of a position exactly that Alameda took or was it with the collateralized instruments we were talking about earlier did perhaps say?

Sam Trabucco or or or Caroline did they happen to get involved within the lunar and the three AC crash where they was Alameda like obviously victim to that because looking on chain it seems to be that that's where the volume started to drop off. The FTT token started to need to really be pegged at 22. It seems like that is the around about the time that you guys really suffered a liquidity crunch through Alameda that that needed to be plugged.

Uh, there were a bunch of different questions there. Uh, I'll, I'm, I'll try and go through some of them. I I'm not going to remember all of them but I but but by going through some of those. So Umm As for why you know Brett and Trabuco left. I I don't think I have anything to do with this. I think you know and they can talk to themselves about why they did but you know from my you know from from from what I knew I I think it was entirely I think it was personal.

In terms of talking about.

I in terms of talking about you know timing, I don't have granular detail here. I don't have access to that right now and I wasn't running out of me. So I don't know exactly what happened. I don't believe that there was a large loss coming from Luna itself. But I do think Alameda was probably quite long the market in general that it had a net long position and that the general market collapse that happened then did decrease its asset values.

Yeah.

A A nontrivial amount I I think there are a lot of other questions asked, but I've forgotten those at this point.

I let, it's OK. So I'll give the mic back. So just I'll give it back to chat, chat, I'll let you continue with a line of questioning please.

All right. Now you've claimed that alameda's trading ties with FX had less than significantly over the years, correct?

Yeah.

Uh yet data from Arkham Intelligence reviews of public blockchain records show that over 50% of allana's deposits and withdrawal volumes since early 2018 had gone through FT X. From all data analyzed prior to August 31st of this year, their data also showed quote, 22% of on chain deposits and withdrawals to FDX, digital wallets, interact with wallets belonging to Alameda, close quote and Anne Chain dot. I was also able to reveal that from June 1st until July.

22nd alameda's known wallets were the largest stable coin depositors and sources of of liquidity to all of FX's known wallet addresses, and your firms were made aware of this data, correct?

I.

So I just to kind of jump ahead of some of this, I think those are all very similar statement.

I prefer that you just answer the question. Were your firms made aware of what I just asked you?

I'm not sure. I was vaguely aware of some things related to that I.

Bloomberg Bloomberg reached out to Alameda on September 14th about this, did they not?

I wouldn't know. I'm not Alameda.

I.

You. You own Alameda and you wouldn't have been consulted on any press. You weren't consulted on anything that had to do with press and Alameda, ever. Is that your claim?

Not in John. I I don't know that I can make a statement about ever. I can't remember having been consulted on you know many things really telling me a press. I don't remember this particularly coming up and I I think I may have been.

Well, but you just said a few, uh, seconds ago that you remember something kind of like this.

Sorry, I remember chatter about some things like this in the crypto ecosystem.

That's interesting. You just contradicted yourself. So this means that you would have been aware of an issue already ongoing at a minimum as far back as September if we're, if we're to believe that you didn't know anything prior, right? So, so why would this not cause you to look deeper into something that would appear to show years after you claim the separation have waned, that Alameda still had too much power on FX trades?

So can I answer the question now?

That's please, yes.

Yeah, go ahead. Yeah, check, allow, please allow, allow Sam to answer. Please check. Go ahead.

OK.

Yeah, that's yeah.

Thank you. So I'm not surprised by the fact that Alameda was a large fraction of stable coin deposits and withdrawals on FTX. That doesn't surprise me at all because Alameda was first of all a large fraction in general of stable coin deposits and withdrawals and activity in the crypto ecosystem. But but second of all, I specifically did do a lot of cross chain conversions of stable coins within through FTX. So in terms of.

Raw notional of blockchain and particularly of stable coin deposits and withdrawals, especially just in a sort of like 0 sum way where there would be some deposited, some withdrawn. That doesn't surprise me that Alameda had a significant footprint there however and and and in retrospect I certainly wish that I had done a much deeper dive into alameda's positions and balances and the history of that on FTX and that was absolutely huge oversight, the comments that.

Why didn't you when there was chatter about this, so?

It's the well.

So the comments that I had been making were around its trading activity and alameda's trading volume on FTX had dropped from something like 45% of volume in 2019 to something like 2% of volume in 2022.

And is that public record is is there any way to verify that claim?

I I've said it many times, I don't know how one would verify it publicly, but you can.

OK. So it's just your work. OK, go on, continue.

I've just. I've just DMD. I've.

I, I, I I can post it like I can post it.

You could ask the relevant teams. You could ask the Chapter 11 team for that data. You could, you know, you could ask anyone who has looked at that day. You could ask many different people. You could look at the files that we submitted time and time again to various OK, yeah.

Yeah, chat. I've just named you as well the data now so you can check your DM, so go ahead, Sam.

Yeah. So, so from a trading and volume perspective, it was the case that Alameda had become a fairly small fraction.

Of FTX's overall activity. Now obviously that was not true, as it turns out when you looked at alameda's positions on the exchange and again like.

I've made a lot of mistakes here and I and that was certainly one of them was not paying more attention to, to, to, to balances and positions. I was looking at volume because that's what drove revenue and that's what to me seemed to be driving like business growth. And so is looking at you know volume broken down by I mean by account but also by you know geography, by source type, by product, you know growth over time relative to other venues.

And and there is nothing that was a real, there's nothing alarming happening in those trends obviously in terms of of positions there was in terms of the on chain deposits and withdrawals.

That's actually I think a little bit of a different thing which is neither of those two and I think is related to the fact that you know.

Alameda I used FTX to convert between different stable coins a fair bit and also I would you know there were a lot of. So one thing worth knowing here is a lot of the relevant wallets got misidentified on things like chain analysis between Alameda and FX.

And some of these wallets were basically what FX was using to convert between two different stable points. So if a user, you know deposited a lot of B USD and then wanted to withdraw US DC, there would have to be basic. And if you know the reserves were mostly in BC at that point they'd have to be a redemption if the USD and then you know a creation of USD C which would be sent back. And so that activity represented a fair bit of blockchain based stable coin deposits and withdrawals to and.

MTX, although it was fairly separate from the rest of what was going on.

Samsung.

Sorry. Go.

In what way were you protecting? What were you? What were you, what were you protecting? Sorry, Mario stopped that. And what way were you protecting customer assets?

Sorry, are you?

In what way like?

In what way was FTTX protecting customer assets? Which way did you ensure the protection of customer assets?

So there were some ways that we did. Obviously there are ways I.

Like deeply, deeply wish that I had done way better at and deeply regret what happened. The ways that I had been focused on it the most had been looking at a combination of basically of like looking at the cyber security side, you know, ensuring that there weren't, you know, hacks on on the wallets.

You know keeping a, you know accounting of the the assets, making sure that that didn't deviate from what you know some balances was getting you know gap audits at the end of each year and I and you know also just dealing with frankly a lot on the Fiat deposit withdrawal side where customers would be trying to send money to and from the exchange it would get.

And and you just mentioned, you just mentioned auditors there who, who, who audited your finances.

I it's. I'm sorry, I'm not. I'm not 100% sure if it's public who that is. I I can.

I'm Sam.

So after presuming that that that that it is I I think probably somewhere here can confirm that it is public, but yeah.

Yeah, that is correct. Yeah.

So I'm just.

So what's, what's, what's what's Prager Metis? Was Prager Metis a auditor? OK, and and where are they headquartered?

Yeah.

So I'll give her around, you ask a question, we'll give it back to chat. Go ahead, Sharon.

OK. Go ahead. Go ahead.

Alright, go ahead. Alright, go ahead check and then.

Uh, that I'd like to finish what I'm saying here 1st and then we'll go to rent. Where are they headquartered? I'd really at the interruptions really aren't helping. Well, where were the headquarters?

I was a US based firm.

OK. And now the Bohemian securities regulator issued a statement on November 17th saying they ordered FTTX to move quote bohemian funds on November 12th. Is that correct?

I there is a statement that was roughly like that, I don't remember the details of it.

OK. And were you able to you, you you were the one who functioned this out according to your statements to you know pretty much everyone over the past few days you functioned this out and were you able to do this as you were still the controlling owner of Alameda and the debtor or or what gave you the capability to do this after the Chapter 11 was technically filed?

I I don't believe that I've confirmed that I was the one who did it, because I was largely not, but in addition to that.

But hold on a second. You you have stated in your interview with Tiffany Fong just a few days ago that you in fact told them of your intentions to do this, at least today, prior to them even making a request. Is that correct?

Sorry, intentions to do what to move.

That I told.

To move the Bahamian funds, I don't believe I'm unclear on that at all.

That I told who to do that because I don't believe that's correct.

That.

The Bohemian regulators, you don't think that's correct? OK, would you? OK, so hold on one second while I play for you your own audio and for everyone listening. This is from an interview with Sam Bankman, Fried and Tiffany Fong from just a few days ago.

Withdrawals were opened first to citizens of Antigua or Bahamas. Yes, yes. And then the regulators are securities said that that was not approved.

That that that that's.

I think the right decision. Wait, sorry.

I gave them a heads up or one day heads up that we were gonna do it. They didn't. They didn't say yes or no. They didn't respond. And then we did it. The reason I did it was I it was.

Critical to the exchange of being able to have a future, because that's where I am right now. And you do not want to be in the country with a lot of angry people in it. And you do not want your company to be incorporated in the country with a lot of hungry people in it. And so it was, realistically speaking, shitty, but like, yeah.

Behavior is not being tested because I guess it could have been looked at as like insider withdrawal sort of thing.

No, this was trying to create a regulatory pathway forward for the exchange just to like kind of appease the citizens of the country that you're currently in, basically.

Was about to be I I assigned a provisional liquidator and.

OK, so that seems to directly fruit what you just told me doesn't.

Samuel muted.

Accident that you were. Hey, sorry, the incident that you were referring to is a different one, I believe, or at least the incident that I like. If you repeat where that came from, the the incident that I believe or sorry, start that question over again, I at least inferred that you're talking about a time when Bohemian.

Yep.

That's right that.

I stated the Bohemian Securities regulator issued a statement on November 17th saying they ordered FTX to move Bohemian funds on November 12th, November 12th, so five days prior and you have then confirmed that to Tiffany Fong saying that you did move those funds to the beginning regulators.

No, those are referring to different things. Those are referring to two different incidents.

I let, I let sorry, just sorry go ahead I want yeah, I know just give Sam the opportunity to answer bro.

So you OK, so then you OK then. So hold on a second, Mario, hold on a second. Mario, you hold on hold. Yeah, I'm, I'm going to, but I'm reframing the question and you're really not helping right now. So the Bohemian funds on November 12th are removed. You're saying are separate. So what was the separation? So are you saying did you move citizens funds and actually allow citizens to withdraw funds?

Hi.

In in which incident?

Ohh I just want.

The incident in which you're referring to Tiffany Fong?

16.

That was a separate thing where we briefly had withdrawals open for some Bahamian residents on the exchange. That is something that I think was you know, for a day or so before abuse of that forced us to turn it off and is a a completely that was prior to Chapter 11, that was prior to any filings. That was when I was CEO unambiguously of of of all of FTX and was unrelated to the other incidents that have been referenced in filings and other things.

OK. So we have Tiffany Fong here as well. Is that was that your understanding of the conversation with me?

Oh, I no, I yes, yes, that was a separate question. It was not regarding the hack that was about the reopening of Bahamian withdrawal. So I just wanted to clarify that.

That was not in reference to the hack.

Guys, do you mind if I go back to just being just say on the on the exchange there were spot positions and there were margin positions point the exchange ran completely out of fans. What happened to the head spot positions on the exchange?

Because they shouldn't have been leveraged, right?

So I.

I so there are a few answers that the first is that there were a number of withdrawals that did happen on the exchange. It is not the case that all of the funds were not available. I think we processed I want to say something like $6 billion of of withdrawals over you know a few day period. And so part of the answer to that question is that they were you know a lot of those withdrawals.

But Sam, let me, let me just, let me just.

Our process prior to to reaching the peak of the liquidity crisis and prior to, you know, withdrawals being effectively halted, there are I think a bunch of other things going on as well there, some of which I'm still digging into, some of which I'm still piercing together. But, but, but yeah, worth noting that like Yep.

Yep.

Right.

Let me just ask you a very simple question. If I'm a user of FTX, I deposited one Bitcoin into FTX on spot. I'm not a leverage trader. I just day-to-day used the leverage exchange. I'm just trying to understand where my Bitcoin is today and I'm just a little bit of clarity of that. Was, was that Bitcoin notional Bitcoin on the exchange but the money sitting on Alameda? Was my Bitcoin used as somebody else's collateral without my my permission?

I'm just, I think let's separate the discussion between spot and futures unfeatured. I understand that there could have been potentially maybe a margin mismatch and I hear you. I'm going to give you the benefit of the doubt because I think you're, I think we had some good interactions and I don't believe that you're an evil, evil person, but I'm just like just wondering about the spot exchange. And that's people that, you know, didn't give anybody permission to use their money, but that money is

Could be.

Right. So one piece of this is that in the, in those few days following the collapse, we processed about $6 billion of of withdrawals and those withdrawals in general were from a variety of sources including some of those coming from, from you know futures position from margin positions that were open and that meant that.

By I that there was not a clear.

That, that, that, that, that effectively, I think broke down some of that distinction between the two sources. Again, I'm trying to, you know, I'm, I'm trying to piece together all of what happened and I don't have access.

To I, you know, to put all of it together right now, but my best guess is that that was at least a significant part of it.

So I just want.

So the the hot wallets between futures and spot were commingled.

Yeah.

So yeah.

Why are we just allowing?

Yeah, so it's it's asking me like the the.

The the hot wallets between futures and sport, where those were commingled, right?

That's right. Yeah. In general, balances were treated as effectively fungible with each other.

OK, understood.

Right.

OK. No wait that's gonna just with that in mind. I just want to try and understand something. So I put money on, I want to deposit money into FTX. I deposit money into Silver Gate Bank which is the United States Bank. I put the money into the into the bank. That money lands up in elevators bank account, right. So now you've got let's say I take $100, I deposit $100 into FT X. But what I actually do is I'm depositing into silver gates account on an account name is Alameda. So now Alameda has $100

Right.

A Bitcoin for a let's put $20,000 in and I want to buy a full Bitcoin. The money is tell me where the money sitting now? Because this is the part that I'm confused about.

Yeah, uh, I'm not surprised you're confused because it's confusing. And I and it confused me and I. There were a lot of poor decisions made there on on our part.

My understanding and again I'm I'm not 100% confident in all of this. I am still trying to piece together all of this again without access to data in retrospect. But but my my general understanding is that and and and here you're referring I think to the you know especially the sort of 2019-2020 era where there were no FX bank accounts but where some customers were wiring straight to Alameda research is yeah totally.

Yeah, I'm just doing, I'm trying to work out if the money ever left Alameda and was stored in a custodian somewhere else, which really represented a balance on the exchange or whether there was a money deposited into Alameda, which we'll talk about in a second. And then you just gave me a notional balance on FX, which was just a digital number on the screen and you let me use that money to trade potentially notional Bitcoin because.

Right.

Yep.

Actually, I didn't have physical balance on the exchange because the money was sitting in an animator account. That's the part that I'm that I'm trying to understand because that would make sense as to why Alameda had so much money to invest in projects and FTX didn't have any money to pay out to customers, right?

Yeah. So I believe that was part of the story and and again I I'm not 100% confident I'm I'm working with what I have here but I believe that that is that what you said is effectively part of what happened. I'll give one caveat to it which is that I believe there was a Ledger transfer away. You know, it wasn't just a pure crediting of the customer and there was a transfer from one account to another but that that debit didn't clearly show up as a debit on Alameda's main account and so did not cl

Right on the dashboard to the the risk of of alameda's position, which is one of the things that led to me being surprised by the size of the position.

Right.

Right.

Because that makes sense as to why there were no more Bitcoin to withdrawal where customers like like that. I know had Bitcoin balances because those Bitcoin actually didn't exist because it was just notional. You were just letting us buy notional tokens that didn't actually really exist.

Because otherwise you would have had to have the SDC somewhere.

Yeah. Or another way of phrasing that would be there is a negative balance balancing with that, right? Yeah, yeah, I I believe that what you're saying is in fact part of what happened.

Chat. Do you wanna continue with your questions, man?

Yes, so just continue here. So when you're saying I do want to go back to those funds that you moved to the Bohemian citizens?

When you moved them, you were already aware of the issues of liquidity, correct?

So I we say move them. This was a question of which withdrawals and which jurisdictions were open when. There were other jurisdictions where thralls were open as well. It was not a single shut off on all process. But yeah there were liquidity issues creeping up and and we had a staggered shut off effectively of of I withdrawals. There was not large size for what it's worth that went out there.

Um, I nearly the entirety of the withdrawals that we processed, I wanna say.

Something 95%, I think more than 95% of the withdrawals.

Were all done prior to any shutdowns, but there was a little bit left that came out from some jurisdictions, the Bahamas being won, Japan being another given that Japan has segregated assets and and there may have been one or two other jurisdictions as well.

Why did you allude to saying that you moved those funds to the heat? Appease Bohemian authorities by ensuring that Bohemian citizens wouldn't be angry at you for losing their funds, specifically in this context.

So I I wouldn't say I moved them. I needed the question of whether to close withdrawals and and it was you know accounts choosing whether or not to initiate withdrawals. I wasn't initiating them but but yeah that was one of the jurisdictions that we were last two turn off withdrawals and that is correct and I.

OK.

OK.

It's.

You know, it felt appropriate given that that was where a primary regulator was, that's where our, our headquarter was and but you know after after about a day of that we started to see some signs of people trying to abuse it and we shut it down.

Sam, just just one question you guys.

OK, OK. And you you.

You.

I dropped out. Go ahead chat.

Yep.

Yeah.

Sam, you claim that FTX US and FTX Japan are entirely solvent and also entirely separate from the rest of your companies, correct? I think everyone would be interested to hear why. You know you filed for bankruptcy for both of those, not just FTX US, but FX and Japan. Why? Why? Why did you make that decision regardless of the time that you made it? If you knew these were entirely solvent, why wouldn't you have argued to keep them out of the the Chapter 11?

I argued for quite awhile to keep them out. In the end, I was informed in a way which I I no longer believe was true, that this filing would not mean that withdrawals would be shut off there, that this is not yet did not mean a bankruptcy filing. That was just a provisional step, but that appropriately appropriate and responsible steps would be taken in those jurisdictions. I am surprised at what happened after my filing. I don't know why that's what happened and I and I regret it.

Right.

Ohh the.

OK. And and and and and just go a little bit further there. So you, you, you specifically though didn't file FX digital markets, right, FX Express pray and and at least two other entities in the Chapter 11 if you were able to choose not to file those how come you couldn't for the US and Japan corporations?

I'm not asking what you wish you could have done. I'm asking why you didn't.

I wish I hadn't. I wish that I had done what you're saying that being said, right. So the reason that I didn't file those in particular was those were entities where local regulators prior to my filing had already stepped in and initiated their own processes. And so I couldn't have even if I had wanted to offer those entities.

And that includes FTX Australia.

Yes.

Um, you said, also said that 8 minutes after you filed the initial motion for Chapter 11 bankruptcy, $4 billion more of liquidity basically was called in. Someone said that they could give you that cash injection. Is that correct?

I, I, I, I don't dispute that I said something like that.

But did you actually get the liquidity of four billion offered to you 8 minutes after you filed the Chapter 11, so that had been 438 in the morning, did you get that?

Um, actually offered to you?

Yes.

By whom can you state?

I cannot.

OK. Umm, why haven't you filed a motion to voluntarily dismiss the bankruptcy cases under under US Bankruptcy Code Section 1112 if you believed that you could save the company through that cash injection and you also thought that have text us and FX Japan were fully solved?

Acknowledge your question. I you know want to make sure that I operate in a you know responsible and compliant manner here. I, you know would be discussing what would or would not be appropriate with Council. And at the end of the day I think that the right parties to be filing here would not be you know, I I think that the right parties would be you know regulators, administrators who are overseeing this internationally who have been.

Uh, you know the charge. But I I acknowledge your question there.

OK. So so you're saying essentially that's a non answer right like because you didn't you didn't say why you haven't filed that motion, you just said you would talk with counselors about that. What counselors you know like like what, what, who, who, who are you paying like what does it cost to you right now for counsel and and how are you affording that given you said that you were essentially cash poor although you said you also had potentially up to $100,000 left.

That's something I'm trying to figure out right now.

Yeah, so you have them on retainer without actual payment.

You know.

I can't go into the details. There are also potentially various relevant DoD policies which are being examined as well but I but I you know frankly that's that that is a concern for me.

OK. And what funds were lost in the hack and and from what entities that you're aware of?

OK.

I don't know the details of that that happened after you know, the Chapter 11 team. But I, you know, I I think I to my knowledge this sort of on chain analytics. As long as you don't count the as long as you make sure to distinguish between the various custodial processes that were taken, then to my knowledge have done a decent job of tracking what that was. But I don't know a ton more than that.

OK. But you said that FTX US lost $250 million in the hack. That was a statement from you?

Correct.

I went one day. I say that.

Ohh.

You said that in the past few days, literally, so, so if you said the FX lost $250 a hack, where, where, where are you getting that information from?

So I would be surprised if I'd said that it had done that. I think I wouldn't be surprised if I'd speculated that maybe the notion of it was something kind of similar to that based on what had happened on chain, but I don't think I know exactly how much it was or from exactly what entity.

OK. But if you're assuming that much an argument, intelligence also reported that around $204 million of funds were moved off of that US exchange to Alameda just a few days prior to the bankruptcy. Does that mean there's a plausibility of 1/2 a billion dollar hole at FTX or a US or does that mean there's just the plausibility of a quarter $1,000,000 hole?

So I will make a few notes that this is all as of when I last looked into it and my data is somewhat still here. So I'm I'm just you know guessing as best I can. First of all the funds moved off they're also funds moved on. There were a lot of deposits and withdrawals on FTX US for many customers including Alameda, but those were those were fully solvent accounts and.

I've lost his audio. Is it just me?

Into my knowledge, you know, all the customers ended positive on FTX US such that there was no hole created by any of that activity. There's not an equivalent to what happened on the international exchange. So that part would not contribute to it. In terms of the hack, I don't know how much that came from FTX US. I I, you know, might be knowable from looking on chain activity. I had believed FTX, you know. Oh, sorry. Yeah.

Yeah, sorry.

Uh, because Sam, we just lost you there for about. We lost there for about 10 seconds.

Yeah, yeah, yeah. You know, it's me too. Ohh. You're back. Sorry, Sam. You just. You kind of.

Yeah.

Starting back, but I I had I, you know, and basically like I to my knowledge, I think that there were substantial surpluses there such that I think it would still be, you know, to my knowledge, solvent, although again, I don't have access to current data.

OK. All right. And.

Who are the company would have?

Go ahead, run.

Hold on on that point, on that point, sorry on that point regarding regarding the the, regarding the US customers, so I know altcoin PSYCHO opened the tweet and I I mean I know many people that are in very similar positions, he says. What about the thousands of customers who didn't an ACH withdrawal pre bankruptcy announcement and never received their money in their bank? Surely if TXS was fully solvent, the bank account used to process ACH withdrawals should have continued processing?

Are these ones that were processed right like shortly prior to that or that were processed that were and?

Before, yeah, just shortly, shortly prior to the announcement, there were a lot of.

Yep.

A customer withdrawals and those just stuck being paid.

So I can't speak to the actions taken by, you know, people who are running that business right now or what decisions they are or aren't making. Just my belief that there would exist the funds to pay out to customers were that to be the the chosen pathway. But I can't speak to which decisions are being made about whether or not to choose that pathway.

It's, but some of these were done days before. Some of these were actually done days before.

I mean I so I don't know the details of individual transfers. ACH transfers can take a week to clear sometimes.

But, but again, I don't. I I don't have access to look into individual ones. I, I, I.

Yep.

No.

They can be called back.

I mean they can't take a week to clear. I agree with you that they can take a week to clear, that's not a problem. But once they are in the system it's just a case of clearing. It's not a case. It's you know if the if transaction if the transactions in the system.

That's how chargebacks work.

Huh.

Hmm. If from a solvent entity? From a solvent entity?

There were lots of customers charging back to FSS everyday attempting to ACH and then retroactively cancel those. Those were solvent customers, although Dicks.

I I don't, I don't know the details of this system, but in general, you know, US transfers are quite messy and for both ACH and credit card related transfers it is very difficult to have confidence I in a transfer until as long as a month after it's been initiated so that that that is a mess.

Saying can I ask you a question and like I don't interrogate you and ask you specific questions but try to understand 29 year old we're dealing with the collapse of an empire which affected probably in excess of 1020 thirty, maybe even 40 million people and a whole industry around it knocking off billions.

I wish we had that many customers.

But it was still millions.

Yeah.

OK. But I mean your customers et cetera, but OK, millions of millions of customers trying to understand as a 29 year old who was around you, who are the five people that you were calling and speaking to. And I'm trying to get a feel for the type of discussions that were happening as this whole thing started to to collapse. Trying to get a feel for who, what are the top five numbers that you were calling and I'm trying to get a feel for what they were telling you to do.

So it's a good question and you know there was a group of employees you know working around me to try to do what we could. I was calling a number of prospective funders to investigate, you know, potential opportunities to.

Yep.

Yep.

But who are you? Who were your confidants? Who were the people that who are the people that were guiding you? Like I know when something happens to me, I've got five people in the office who are really close to me, and I know who they are and their partners and they know that their brothers for life. But who are you phoning? Were you were you phoning Caroline? Were you speaking to Gary?

Yeah.

And then I'll, I'll add I'll yeah Gary, Gary and and Gary being a childhood friend and cofounder as well, Sam, I'd love to know more about his involvement.

So I mean I was yeah I was calling basically I and calling and or speaking to in person you know primarily other core employees of the company's other employees who had you know relevant stakes in it, who had you know relevant thoughts. But it was you know was the core employees were the bulk of who I was you know counseling with. Then we I did call you know some external advisors, a few key investors, I called a few.

Partners.

Yeah.

What about Caroline? What about Caroline? Were you were you speaking to Caroline during this whole thing? I mean were you guys are lining on exactly how much money I made ahead and what the value of the positions was because you know ultimately she was the CEO. I mean how how many times of the where was she on the list number in terms of frequency was she number one was number 3 was the number five?

Then.

I she was not physically in the same place as you know this is happening. So there were you know a fair number of phone calls, you know, to do exactly what you said. Like as soon as this happened, you know, one of the first things that we said was we need to know exactly what the deal is with not just alias balances and positions on FTX, but everywhere. You know we want to know exactly what funds there are. We want to know, you know, whether margin call will be able to be hit. We want to know ho

You know, with her around around that, although she, again, she wasn't physically in the Bahamas when this is happening. And so I was, you know, speaking more frequently in some sense to the, you know, the employees who were who, who were there.

And.

What about Dan Friedberg?

I don't wanna, I think, go into where specific employees heads were at just because I think that's for them to talk about it if if they want to.

And I.

But it was he one of the top five or was he one of the top five people that you were? I mean, he was a big adviser, wasn't he?

Yeah he was he was a, you know, a big employee of of of the company a big part of our legal team. I think that I that you know everyone served in those positions where people are trying to consult with and you know I don't want to sort of go into details of where they were out unless they kind of give me permission to do so. But but you know you can look through who were you know the core developers, the core people on the legal side, the core people on the you know, ventures M and a side and on

For support, VIP support, like all of those people were sort of huddling around to some extent and, you know, trying to figure out like what the right things to do were. But at the same time, I was not as communicative to some of those as I wished that I had been. I was, you know, including some people on that list. And I I think in retrospect that was a failing of mine as well. I was very nervous to see something companywide that both because I I wanted to make sure I didn't say something.

That I didn't believe and I wasn't sure what was happening. Like I was trying to figure it out in real time, but also because at some point everything that I said started leaking out pretty quickly and so it sort of broke down the ability to have that much of a distinction between company wide communications and public communications. But I think in retrospect.

I wish that I'd just been, you know, saying what I knew when I knew it, pretty transparently, and accepted the fact that I was going to guess wrong sometimes and the fact that a lot of it was gonna get out publicly. Because I think I owed it to the employees who had been fighting with us for for years to tell them what I knew when I knew it, even if I wasn't confident in it.

I'll let you continue with your with the questions.

Yes. So um, Reuters reported $10 billion in funds. We're, we really need to get back to this point. The $10 billion in funds were transferred without FX customer knowledge to animator from FX.

Alison herself said this statement, right? So is it true or that you or the team had management of the controlling owner right there and move these funds regardless of method?

Text elevator.

So.

And I do think that there was Umm you know Almeida ended up with a substantial margin position open on on the exchange. I think that you know the I you know which is the overcollateralization margin position was a fair bit of it. I think that the avenue that that ran talked about with the historical wire transfers was was was part of it as well. I think you know you add those up and and I think you probably get to to to to most of it although again this is I don't have.

Hold the day right now. So that's that's sort of piercing together and a lot of these things were things.

Where did? Where did the funds come from that Elimated was able to margin?

Right that there it we see that they're able to margin do you?

Yep, Yep, Yep.

Yep.

Yes, where did the because that's that margin is alone effectively correct Alameda where did the funds come from to for that loan?

I they were you know and the collateral came from assets that Alameda owned and the liabilities were you know short margin position open on, on FTX coming from you know the assets that that FTX had.

And how did you know this much about this move, even though you said you didn't know there was that much on the sheets?

Ohh, a lot of these are things that I have pieced together after the fact that I did not know at the time or was not fully aware of at the time. You know, this is sort of a hodgepodge of things that I knew, things that I didn't know but have since found out, and things that I'm I'm guessing at and given what I've been able to find out, but I'm not entirely confident in.

Were FTX consumers made aware of this move?

But Sam, Sam. Sam.

Yep.

It's just before I wanna go on that on that specific point.

Ohh.

Alan made a elevator. Is it possible the elevator was withdrawing real dollars from FT X and instead putting FTS collateral? So almost taking FT, putting it as collateral and then withdrawing real dollars in exchange as against that FT collateral?

I yeah, I mean a lot of clients were doing that. I do believe Alameda was doing that as well and was doing that for a substantial size.

Yeah, I mean, the size that I saw was more than they were supposed to have was unlock tokens. Do you think it's possible that maybe they were leveraging more tokens than they had unlocked?

I I don't believe it's more than we're unlocked because all FG tokens are unlocked at this point. There are separately. So I think that what coin gecko and coin market cap sort of denoted as as circulating tokens. I believe that was effectively not counting FTT tokens held on FTX. I think that's roughly how it was implemented that it was because it just done by looking at a set of blockchain addresses and they were basically taking all tokens except for those on some specific subset of blockchai

Dresses. And I think what that was doing was just excluding at least some if not all of FTX's wallets from that calculation and probably had been for a little while. So I think that the the circulating supply calculations on coin market and coingecko were, I mean they're displaying a particular thing. I don't think that that thing was was necessarily what was the most intuitive thing, but all FT had been unlocked for a little while.

Thanks, Ben.

And you stated in your text.

Let's unbox it. You're new deposits from FTX consumers were essentially lent out to Alameda and that Alameda then invested with these funds, correct?

I something roughly like that.

OK. And so you then would have had been aware of that that happening and that report now by Reuters we referred to back, it also stated that up to $2 billion of those funds are now missing.

Uh, when Reuters asked you about this, no clarity was given. In fact, you responded with three question marks. So I'm asking you in front of our audience here, the live crypto audience here, where did that $2 billion go?

I'm so confused. So first of all, I didn't. I didn't say like new as of when that that was happening. It's not clear to me what you were saying there in terms of when I knew that, but second.

A.

Sure, I.

I'm not sure that I asked you a question, Sam. Then can we just stick on that? I'm trying to keep this to where we can keep it very cordial and and really inform the audience. So you know in that report it said $2 billion of those funds are now missing right from the 10 billion they're released up to 2 billion, at least one to two billion gone from the balance sheet, disappeared, no one knows where they.

Where did the where did that $2 billion go?

I have no idea what. I have no idea what that's referring to.

OK. So you you had no oversight of that much money being able to just disappear from one of your firms?

Wait, I'm not sure. Sorry. Uh, I'm not sure I'm even agreeing that that is what happened. I'm confused by that statement and.

There's a report from Reuters that says that up to $2 billion of the $10 billion that was moved that you just said you knew was moved.

Sorry, which $10 billion that was moved?

Of the $10 billion there was moved to FTX without customer knowledge from Alameda to FTX.

I I if you.

The 10 billion that we were just talking about that you just said that you knew we were talking about. I don't understand the confusion.

Umm, I'm not sure about a 10 billion numbers, sorry. If you could point me to this article I think it would help. I I.

Legitimately unsure what this is.

Referring to.

Yes, anyone. Feel free to pin that writers article to the top of the the space.

So.

Alright, so, so, so we'll we'll move past that for right now and I'll go back to that in a second. So in October 2021 you conducted a raise for FCX, correct?

I, I, I, I mean, there are races over the course of 2021, yeah.

OK, but you did a specific raise Umm with second and some others.

69 investors, to be precise, including Sequoia, which called it a meme round. How much was that raised for?

I don't remember how much that round was in was at the 400 million round roughly.

Right.

Yeah, $420.00 at $420.69 million raised from 69 investors, which is quite called me one. What were those funds used for?

Acquisitions.

Did you take any of that money?

Who is you? Here is you.

SBF Sam, the person I'm talking to, did you take any of that?

To my knowledge that was used for acquisitions for for FTX.

According to FT X Financial Records, internal records reviewed by the Wall Street Journal.

Actually, 3/4 of that race, $300 million, went directly to you from you selling some of your stake in the company.

Ohh.

Where did that $300 million go?

Ohh, sorry, the the particular $300 million from the resale?

I.

That I'm not sure that's that same round that you're talking about. I think that may have been that one of my memories it was it was a different but you might be right. But either way that was you know or slightly before that I had bought Binance out of their stake in FT X for a few billion dollars and then had resold a small portion of that secondary to investors. So it went to recouping the cost from.

You know, buying Binance out.

OK. And and you said you, you, you didn't conduct any risk management at FTX and Alameda in all essence?

When you and you said this in the New York Times Deal Book Summit yesterday, correct?

I may said I did like very. I don't remember exactly how I phrased it, but I I did way, way less than I should have.

He said essentially there was none. When you pitched your firms to accredited US investors, did you tell them there was no risk management in place?

So there was some risk management in place. I myself did very little there. I wish that I had done way more and I myself did very little in terms of appointing anyone to do it. Now, there was a lot of risk management that was in place in terms of automated, you know, risk management systems, but there was not, in retrospect, good oversight of this. That was a big mistake. I don't believe that I made any material misstatements to prospective investors, although obviously I.

Recollection of everything that I said. Everything that I said I I thought to be true.

What did you what did you present to them as like the risk management profile of FTX when you pitched to them?

Was that part of it?

I don't. I don't remember in detail. I don't remember detailed conversations about it. I'm not sure there weren't. There were a lot of conversations that happened.

But I but I I you know, I'm. I'm. I'm not sure there weren't. I don't particularly remember on many.

And it does. So there weren't a lot of due diligence processes that took place.

OK, I think we lost him again.

And I think that there were due diligence on on some things. I think there's a lot of due diligence done on my sense is that ohh, yeah, sorry about.

You're back. You dropped out. Five seconds here. Go ahead.

Yeah.

OK, alright, continue Sam.

My sense is I and I don't want to put words in other people's mouths, but you know, my sense is roughly that when people were doing their diligence here on that perspective, investors were thinking of it primarily from the perspective here.

Umm.

I, you know, they were looking at the upside here. They were looking at, you know, what could the business become, how could it grow. That's what you generally do as as a venture investor. And if if you are, you know, primarily concerned about, you know, the downside of venture investment, that probably means it's an investment that you don't want to make and aren't going to bother investigating in the first place.

So you're so, so the point that you're making is that they didn't need to look into the risk management profile?

OK. And and did I did I lose you there again? Sorry, it stops. OK.

I'm not necessarily saying they didn't need, I mean I don't want to make a statement about what they needed to or didn't need to do. But I think from their perspective that they saw themselves as I I would guess as primarily looking into what is the upside of this business and yeah, sorry but but you know at the end of the day like obviously they, I don't want to talk for them like they should talk for themselves.

OK. And did you ever update your investors on the status of your risk management profile?

I.

They don't remember having like a specific.

You know, update specifically related to that I I don't remember everything that's been said but I.

I'm I'm not sure exactly what you're what you're getting at there or or or you know if you're asking like did I have a special session where you know called like updated risk management like no.

Did you have any regular meetings with your investors?

Yeah. Uh, we would have a call every every few months to talk about the business.

OK. And and and and the ways that you were controlling customer assets or anything like that that just didn't come up is what you're saying?

I don't think it particularly did.

OK, so, so that interesting. Now, uh, yesterday in the New York Times Deal Book Summit, you made an interesting statement. So it kind of stuck out to me. You said you quote mark the acid salimata used as collateral.

Um, how then were you not aware of the size of alameda's FT collateral then? And wouldn't this mean that you had access to elimate's bookkeeping?

Umm.

Sorry, you said that at the Deal book summit, I said.

Yep, Yep.

You said that you were when you were asked about the marking of the assets and whether they were marked properly. Do you remember that question from Sorkin?

I vaguely, yeah.

OK. And you responded saying that with Alameda research you marked those assets?

And that would mean that you were the one who had determined the price of them on the book, correct?

I'm good at algorithms which determined the price of those on the book.

OK, so then what did you mean by you had marked the acids elevator?

I.

I think I was, I, I sorry, I don't remember the exact phrase that I said. It may have been me just saying like you know we as in like FTX you know the, the, the, the product we're marking all assets to market prices.

But I'm sorry, I actually don't remember exactly what I had said then.

OK. So, so but I said to you that you said that you had marked the assets that is something that you said directly in response to his question as to whether you thought that they were marked properly and you felt that they you might not basically might not have marked them properly while you were making the eleda against everything else but doing and doing. So that would mean that like that is access to the books, is it not?

Sorry so this is to be clear marking.

The assets of Alameda on FX right looking at the the collateral that Elimia held.

I.

No, this is just marking aluminous acids. You didn't say anything about FTX specifically assets that were amazing assets. On FTX. You were specifically mentioning how much was marked as far as the collateral of Alameda.

Yeah, but I think that was implicitly the collateral that it had on FTX is my memory of what that was referring to. But I mean I either way, sorry, I can I can talk about what, what, what what I actually think here.

OK.

Which is that that that you know I I in general like FTX was marking assets to what their market prices were and that when I was thinking about the risk profile of large positions on FTS and specifically of Alma's position, which I was also surprised by the size of in retrospect. But but in addition to that that when I was thinking about not from a formal marketing perspective but from a.

Just in my mind, how do I think about this? Is this something I feel nervous about? Is this something that I need to be investigating more perspective on that I was substantially underestimating what crash with risk would look like. And I was thinking about, you know, 50% haircut as a substantial, you know, very large haircut rather than, as you know, possibly even an underestimate of what would be necessary for a short period of crash in some circumstances. So you know.

And I think it was I I.

I I certainly think that I I made some big mistakes there and how I was thinking about it.

OK, but.

Sam, sorry, it's running again.

Let me go.

I wanna. There was, there were a couple of accusations about the way that you ran the exchange and I really wanted to try and get to the bottom of it. And one of the accusations was someone that went on to bitboy, sure I'm not sure if you heard the show, but he mentioned that.

FT X was creating more tokens than there were in circulation, or more tokens. And they were given for their market making role, almost creating synthetic tokens and trading in these synthetic tokens that they're never really had yet. Some really convincing evidence. He showed a little bit of like Unchained data in terms of, you know, the number of tokens they sent FTX versus the number of token FTX and the tokens that were returned. And his accusation was that FTX was trading synthetic or fake p

To manipulate price, do you think that could have happened?

I'm sorry.

Let me just explain it to you again.

So I I I think that I I I frankly don't know actually exactly what you're referring to there. I am sorry did not hear that particular one. I'd love to look into that more if you could like send me a link to that and get back to you on that but an FX didn't trade as well so for.

Let me just explain it to you like like for example, when, when when a token gets listed in exchange. Sometimes the token would be required to give to the exchange to to launch certain tokens with the exchange in their role as a market maker. And this specific project claimed that you were selling more tokens than you had as a market maker. And when the time came for FDX to return the tokens to the project, there weren't enough tokens.

And.

I'm just trying to understand like, do you think that it could be possible that maybe you guys created called Fake Talk? I don't synthetic tokens, fake tokens.

So I I I think you're probably talking about Alameda. They're not FTX and I don't know the details of that. I'm I'm sorry I wasn't running Alameda and I but I can I can try and look into that.

Simon, I know you had a question as well. Go ahead, Simon.

OK.

Um, now maybe it would be good to look at some of like the key events because um obviously we've gone quite deep here into like the specifics around I think maybe some of the things leading up to where what got here like starting at the the lunar situation a lot of people don't have real clarity on.

People's involvements in that. So one of the like Sam, it would be great to hear your perspective on.

Like a lot of people believe that there was some efforts from people really exposed to Luna, you know, to try and save Luna or try and and there was some renicks of certain agreements. My understanding was like Celsius, Galaxy, Almeida.

Are you like, would you, could you share with us like some of the any of the things that were happening between those that were significantly affected because obviously this is the start of the story.

Um.

No, I I was, I I actually know surprisingly little about the Luna side of this. I don't like to my knowledge neither you know, FTX nor I, you know, nor Alameda were particularly involved in Luna. Obviously the market crash was quite relevant for them in the industry as a whole, but but I don't think that that there's that much specific.

If any specific Luna involvement, I think that there were.

I.

I guess I think that like.

I mean they're obviously a lot blowouts in like borrow lending desks around then that came from sort of secondary exposure to Luna, you know, flowing through three arrows and and other places, but I I don't know much outside of that.

Do you know um like anyone that made significant money from the lunar claps, was there a way of like shorting um the the stable coin on using any of the products on FTX?

I think there are probably a lot of good arbitrages to do like I do think that is likely the case and I think that you know things were just like not trading really exactly in line for most of that period. So I yeah, I think, I think they're really good trades to do then.

Meeting.

Did you did you have any like meetings yourself or anyone in the team you know about like with um?

Like Alex Machinski, people from Celsius, you know, Novogratz or any of any of these people that were deeply affected by it. Was there, was there any kind of meetings that you know about where people were?

Trying to figure out what to do because there's there's like rumours that.

You know when when Celsius decided to try and get out for for some of their clients?

Um, that that was like a reinig of some kind of agreement and that upset a lot of people. Do you know anything about that?

I I don't. I obviously it's a meetings with like Barrow lending firms around that time around the troubles they're facing. But I I don't unfortunately know anything about you know things specific to to to really like the Luna side.

So I've got a Simon, I've just sent you through username. Chairman, I'll let you ask you a question, man, thanks for patiently waiting. Simon, I've sent you username. Do you mind? Because my space is glitching. Can you send them an invite up? I've just sent you the username. So to send an invite up, you gotta click on the icon at the bottom. Guests click on speakers and click on invite speakers and add the username. But chairman, let me ask you a question, man.

Uh yes, Sam, uh, would you be willing to go on uh up? Only hosted by Kobe and Ledger status?

Uh, potentially I, I, I, I suspect that I have been messaged about that. I'm sorry, I'm still digging through my my backlog of messages, but I'll try and I'll try and put that on schedule.

I've got a question.

Don't. Come on. Don't gotta. You gotta go on it. Come on.

I've got another question for you as well, Sam, the tweet. So there's well, Simon invites a guest to, to ask you a couple of questions and I know you have to go in in about 5 to 10 minutes. There was a tweet on 11th of October. At some point I might have more to say about particular sparring partner, so to speak, but you know glass houses, so for now all I'll say is well played, you won.

Excellent question.

Most will assume this refers to to CZ and would love you to elaborate on this. It's been a while since the tweet.

Yeah, it was um and um, I mean.

Look, mostly I screwed up and I and like.

I feel incredibly bad about that and it hurt a lot of people and.

I you know, whether or not it matters and can do what I can to try and make it right and and and I don't want to try and deflect responsibility from that.

You know obviously there are other things that also contributed to what happened and you know there was a a pretty sustained PR salt which I underestimated and and you know underestimated the impact of an underestimated the execution of and I think that was quite impactful and was you know what sort of with the match here but but that doesn't change the fact that I wasn't on top of my shit.

Hey, Mario, since he's leaving in five or 10 minutes, can I ask you a couple of questions?

Yeah, sure. Go ahead, man, while we'll bring up the guest. Go ahead.

Fantastic. Hey, Sam, did you or any of your business entities or family members ever make any donations to political parties or politicians on the Bahamas?

I I'm not sure, not to my knowledge.

You can't just say that with answer that with yes or no.

Uh, I don't. I don't know if cases where we where we did I I mean, I wouldn't necessarily know if like someone had at some point made some donation on behalf of someone to you, but like I don't know if that having happened.

OK. Have you and your lawyers been in touch with the US Department of Justice about your case?

I can't talk about, you know, any specific communications or lack thereof with specific, you know, regulatory agencies, but obviously would be, you know, looking to engage constructively if you know, if and when that were to happen.

Yep.

You know, the reason why I'm asking is in several interviews you pointed out that FTX US has enough funds to pay W customers.

Yes.

That is a strategy to ensure that the US Department of Justice doesn't charge you with a crime because the DOJ doesn't have jurisdiction over foreign FDX customers.

I mean it's a true fact. It's like FTX US was in fact a segregated business and it didn't have you know any of the properties that that that led to the issues on FTX international. And so you know to my knowledge it is solvent and and that doesn't take away what happened on the international platform but I but I don't know at least it's something.

Have you transferred funds to FTX US before the bankruptcy to enable this defense strategy?

I no FTX US was to my knowledge always solvent.

And some of your recent interviews, you used the phrase I don't have the details 116 times. Why is it that you know so little about your own companies or even about the real estate deals that you facilitated for your parents?

So I many of these things were things where I was not the one who was primarily doing them. And then many of these things are things where there exists data that would make it entirely possible to answer these questions. But unfortunately I don't have access to that data right now. And you know you could ask the Chapter 11 team to try and get access to to such data that might help answer some of these questions. But I you know, I I don't I don't have that data about my you know the companies.

That that I started right now.

OK, do you have any idea?

And I think I see. I'm Kim. If we can give coffee, if we can give coffee. Zilla the mic after this question, if you don't mind.

Yeah, go ahead, Kim. Last question. Coffee is a lot. The mic is yours.

Get two more things really quick. So you keep saying that you want to help your customers getting their money back. What are the concrete steps that you are taking?

So, you know, I mean, look, a lot of this isn't in my control right now. And, you know, a lot of this is, you know, going to be up to the, you know.

Global administrators and regulators who are involved but I'm happy to be of assistance to any of them anyway that I can and and you know in any way that they want me to be. But you know I would be excited to be to the extent that you know I could help find you know help put together anyways or or be a part of that to help make you know make customers more whole by you know probably by there being more funds for them to have access to.

Coffee, zilla. The mic is yours, man.

Hey, thanks for having me. I just wanted to quickly ask, so there's this big question about this $8 billion that went into some kind of a stub account. If I just want to get some clarification on this. From my understanding, what you're basically claiming is, is that back when FTTX didn't have banking, you'd use silvergate through to have people to wire money to Alameda research?

And then credit them on the FX side, but you didn't actually account for that money going back to them. So essentially you had like $8 billion coming to FX you didn't have on the books technically. I mean how can you explain more how that works because it seems like such a key part of this whole thing and so far we've gotten like very vague things about sub accounts. Just try to be as specific as you can on how that actually happened.

So I so and and again some of these are things I'm trying to be together I don't have the full answer to but but I think that part of it was I believe that there was you know a correct FTX accounting on in terms of you know the audited financials. But I but that at least I can say that when you sort of pulled up you know on a dashboard what.

What, you know the accounts look like.

Right.

It would not have I. It wouldn't have I displayed, you know, those transfers, and it wouldn't have displayed the balances related to those, which meant that it was that the sort of what you would naively see as the relevant, you know, it's the relevant sort of position size was quite a bit smaller than what the full position size was.

Yeah, that's right.

Specifically, you're talking about the funds that went into Alameda that was credited to FT on on the customer side on FTX. You're saying you're saying that basically when you looked at your dashboard, Alameda was using those funds to trade perhaps, but that ultimately you couldn't see that on the Alameda side because there was some kind of an accounting problem where there was a mix up with where it was credited is, is that the story?

Yeah, it's something roughly like that or at the very least that the, the, the, the common displays of it did not, did not, did not include that piece of the accounting.

A real quick second follow up. Um, so I've talked to a few Alameda insiders and I've kind of run them by your story of things. I think you probably are aware I'm pretty skeptical. And they one of them when I told them like sort of like, could it be that Sam wouldn't know about this somebody who worked with you and they actually like they laughed and they said there's no way he's like, he's like claiming to be stupid now when he was like this genius wonder.

And so my sense of things is, how do you explain this? How do you explain the fact that you're some of some of the people who worked with you for years, your employees have come out and said there's no way he didn't know about these back doors, there's no way he didn't know what Caroline was doing when you guys were very close, the offices were right next to each other. I mean, how do you expect us to believe this story you're spinning?

I mean.

I don't know what to say. Like I I had a lot going on.

And I was spread then I was a bit less grounded than I had been before.

And I lost track of a lot of important things and I I mean, I think that.

Those are our bad things.

Well, hang on one second. I think spread thin is one thing, right? Like I think that, you know, things can get out of hand, but we're talking about a fundamental understanding of whether Alameda was commingling funds with FTX. I mean, I saw your Stephanopoulos and Sorkin interview and you're pretty categorical that you had no idea that you were mingling funds. So that's what I'm asking about. Not like did you know exactly what was happening on November 7th or 8th? I mean, I can understand sort o

Mark, you're telling us you had no idea?

Was not aware of a lot of what was going on. I was vaguely aware that some of these systems existed. I ain't no details of them. And I and I, you know, was not spending much time.

And on, uh, looking at, you know, position risk management, it was a big mistake.

Umm.

I mean, we're right.

That's, that's that's real.