A top FTX executive who resigned from Sam Bankman-disastrous Fried’s cryptocurrency exchange just weeks before it collapsed claims that Bankman-Fried was a “insecure” manager who vowed to destroy anyone who stood in his way.
Brett Harrison, the former CEO of the US subsidiary of the insolvent Bahamas-based company, stated that Bankman-Fried exhibited “vengefulness” and “total insecurity” when his judgments were questioned.
Harrison tweeted of Bankman-Fried, who remains under house arrest in Palo Alto, California, while awaiting trial on federal fraud and money laundering charges: “I realized he wasn’t who I remembered.” 30 year old Bankman-Fried has pled not guilty.
Harrison sent a lengthy series of tweets recounting his final days at the company, which was worth more than $26 billion at its peak but filed for bankruptcy in November.
Harrison wrote on Saturday, “My relationship with Sam Bankman-Fried and his deputies had reached a point of total deterioration after months of disputes over management practices at FTX.”
The demise of FTX was precipitated by Binance’s decision to dump its holdings in FTT, the digital currency developed by Bankman-company. Fried’s Changpeng “CZ” Zhao, the CEO of Binance, also stopped conversations with FTX over a rescue acquisition.
Alameda Research, Bankman-hedge Fried’s fund, used customer money to finance high-risk wagers. After FTX filed for bankruptcy, a CEO was hired to assist investors and creditors in recovering billions of dollars.
Harrison, who served as president of FTX US for less than 18 months, is not facing criminal charges. During his brief term, he stated that he detected signals of problems soon.
“From the beginning, I noticed that while Sam was rarely involved in US business, decisions affecting the US would be made in the Bahamas without prior notice,” Harrison tweeted.
Harrison stated that within the first six months of his term, “significant cracks appeared in my relationship with Sam.”
Harrison asserted that Bankman-Fried would not consider experienced hands’ dissenting opinions.
“Around that time, I began strongly advocating for the separation and independence of the executive, legal, and developer teams at FTX US, but Sam disagreed,” Harrison tweeted.
Harrison asserted that he stood up to Bankman-Fried, who surrounded himself with a coterie that lacked the courage to challenge his decisions.
According to Harrison, “there was tremendous pressure not to disagree with Sam, but I did so anyway.”
Harrison stated that Bankman-dominance Fried’s over the organization made it more difficult to criticize his decisions.
“His influence over the media, FTX’s partners, the venture capital industry, and the traditional finance industry was pervasive and unyielding at that time and throughout my tenure at FTX US,” he added.
“In any circumstance, standing up to an insecure, conceited manager is difficult,” Harrison concluded.
“However, it is nearly impossible when daily, every major voice of culture and commerce deafens you with a story implying that if you disagree with your manager, *you* are obviously wrong.”
Harrison stated that Bankman-Fried ignored “experienced professionals” from various legal firms and banking institutions who joined FTX.
Bankman-Fried pled not guilty to multiple counts, including fraud and money laundering.
According to Harrison, our cumulative expertise and professional acumen were routinely dismissed as irrelevant and worthless.
It was tremendously frustrating for everyone involved.
At the time of his September resignation, Bloomberg labeled Harrison’s departure as a “surprise exit” that raised eyebrows in the bitcoin industry.
Prior to joining FTX, Harrison worked at Citadel Securities and Jane Street, a quantitative trading firm. Additionally, Bankman-Fried and his ex-lover Caroline Ellison, the former CEO of the defunct bitcoin hedge firm Alameda Research, are Jane Street alumni.
Ellison and Gary Wang, co-founder of FTX, pled guilty to federal charges as part of plea bargains. In exchange for reduced terms, they’re expected to testify against Bankman-Fried.