Samuel Bankman-Fried ‘dislikes’ Bitcoin, ARK Invest’s Cathie Wood says

ARK Invest chief executive of investment Cathie Wood has said FTX former CEO Samuel Bankman-Fried dislikes Bitcoin, saying the token is too “transparent and decentralized” for him to control.

Wood pointed out that FTX and other troubled crypto companies like Alameda Research and Celsius had always championed decentralization, saying that it could solve mismanagement issues in centralized finance like frauds. However, these defunct companies conducted mismanagement of customer funds on their own.

After FTX announced bankruptcy, a court filing disclosed that Bankman-Fried had used customer funds to bet on tokens and crypto projects via Alameda. The court filing also revealed that FTX — one of the largest crypto exchanges in the world at its peak — did not have a board of directors to oversee its operation.

Meanwhile, Celsius was under probe for freezing client withdrawal before filing for Chapter 11 in a New York court. On-chain data showed that Celsius executives had withdrawn crypto from the platform before that withdrawal freeze. Recently, the bankruptcy judge for the Celsius case ordered the company to return $44 million worth of crypto to former customers.

ARK Invest is among several investment companies hit by the contagion effect from the implosion of FTX. Its exposure to FTX doubled as several other crypto companies it had worked with faced crises following the collapse of the crypto exchange.

Reports suggested that ARK had increased its Grayscale Bitcoin Trust (GBTC) holding. Last November, the investment bought 177,000 GBTC units. According to ARK, Bitcoin still showed a bullish tendency despite the current crypto winter — exacerbated by FTX’s bankruptcy. Wood attributed the bullish movement to its pure decentralization.

MicroStrategy CEO Michael Saylor — a long-time advocate of Bitcoin — also accused Bankman-Fried of attempting to “undermine Bitcoin.” Recent reports showed that FTX had made covert payments to Mike McCaffrey, the former CEO of the crypto news platform The Block. Some parties also alleged Bankman-Fried of attempting to destabilize Bitcoin to limit his company’s implosion.

"This is just the tip of the iceberg. How many other journalists, academics, money managers, politicians, charities, influencers, & lobbyists did he corrupt or co-opt?" Saylor said.

Bankman-Fried to testify before Congress

Bankman-Fried is expected to testify before Congress on Tuesday, as announced by the U.S. House committee on financial services. In addition to Bankman-Fried, current FTX CEO John J. Ray III will also be present.

Bankman-Fried has shown his willingness to provide testimony to Congress about FTX’s bankruptcy. The 30-year-old said he could not provide much information to government officials due to data limitations.

Bankman-Fried will discuss certain issues with Congress, including the solvency of FTX’s U.S. branch, the fate of its American customers and solutions to return assets to international clients. The MIT graduate also said he could discuss the root causes of his company’s failure.

His willingness to attend the congressional hearing came after public tweets by Maxine Waters, the committee chair, who deemed Bankman-Fried knowledgeable about the bankruptcy case. Waters added that she would subpoena if the former CEO refused to appear before her committee this month.

The hearing will be conducted in a hybrid system, but it is unknown whether Bankman-Friend will attend in person since he resides in the Bahamas, where FTX was headquartered.

Bankman-Fried has participated in several media interviews and made public tweets after his company went down. He denies the allegations of committing fraud intentionally. According to Bankman-Fried, he did not mean to comingle FTX’s funds with Alameda’s. He has also claimed that he only has $100,000 in his bank account.

FTX’s bankruptcy in November was initiated by the publication of Alameda's balance sheet, which showed that most of its assets are linked to FTX, its sister company. It caused distrust in the company’s financial health, leading to a massive client withdrawal which FTX could not accommodate due to the lack of liquidity.