His mistake was that he no longer worked 18 hour days, according to SBF

Feature Image: HackerNoon’s Midjourney AI, prompt “hustle porn”

For the above to go wrong, I, as CEO of FTX, had to make a number of significant mistakes.

1. I believe that the thread that most ties them together is that, for much of 2022, I was less grounded in operational details than I had been before.

2. I had prided myself on staying grounded: staying in the weeds, day to day, of the company.

3. But by mid 2022, I believe I was spending, approximately:

   1. 25% of my time talking with regulators and policymakers in DC and beyond
   2. 25% of my time on branding and new pathways for FTX, including remittances, financial settlement, and sports partnerships
   3. 25% of my time managing FTX’s growing workforce

4. Together, those were maybe 25% of my time in 2020, but by 2022 they were closer to 75%. That’s time that wasn’t spent focusing on the actual core product, including risk management.

5. I also prided myself on having a strong work ethic; I began FTX by routinely working 18 hour days. But for much of 2022, I believe that I was working about 30% less than I was used to. And even when I was working, I was less focused and disciplined than I used to be.

6. I thought that I could hold FTX together despite the expansion. I was wrong. I bit off more than I could chew, and ended up failing to focus on risk management.

I deeply regret what happened, and I would give anything to be able to go back and put in place the detailed oversight and risk management that I should have.

Right now I’m focusing on what I can do to make customers whole, and reflecting on what I did wrong. There are a number of things I wish I had done. Among those:

1. I wish that I had operated FTX International with a consistently high degree of transparency–to myself, and our employees, and customers, and regulators.

   1. We were transparent about market data and access and fees and many other things

   2. We were not transparent–even internally, even to ourselves–about assets, and margin, and positions, and risk.

   3. I wish that I had ensured we built out public monitors that displayed:

      1. Total client balances
      2. Total blockchain balances, and the corresponding addresses
      3. Total bank and fiat balances that were in FTX’s name
      4. Total bank and fiat balances that were in a payment processor’s name
      5. Total margin position size, and total futures position size, and the amount and types of collateral that were utilized to support those
      6. The treatment of margin and risk on all accounts

   4. I wish that we had deployed:

      1. Public API endpoints to pull the above data
      2. Private API endpoints that served anonymized versions of account balances and risk to regulators for oversight

2. I wish that, when the cracks began to show, I had communicated openly with our employees, users, and community, rather than freezing up and remaining mostly quiet per lawyers’ instructions as people wondered what was happening.

3. I wish I had not clicked on a button on Docusign at 4:30 am, leaving some of FTX under destructive leadership. And I deeply regret not taking the advice of employees and supporters who knew what Chapter 11 would mean for customers. I received a call from a regulatorily experienced advisor who I deeply trust and respect, shortly before 4:30 am, imploring me not to do it. What they said felt correct to me. I talked with my counsel, who strongly pushed back. In retrospect I can confidently say that they were right and my (now ex) counsel was wrong.

4. And more than anything else: I wish that I had remained grounded, and spent at least as much time focusing on and safeguarding user assets and risk as I did on branding and partnerships.