Sam Bankman-Fried is the founder and former CEO of FTX. In an interview with Tiffany Fong published Tuesday, Bankman-Fried explained why FTX prioritized Bahamian withdrawals.
Bankman-Fried told Fang that the collapse of his exchange’s token FTT led to a bank run not because of any margin calls directly, but because of a massive sell-off driven by fear.
Faced with a liquidity crisis and forced to admit that the exchange did not hold one-to-one reserves of client funds, FTX froze withdrawals for all customers on November 9. The next day, FTX announced that Bahamian “regulators” ordered it to enable withdrawals for its citizens.