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“You’re a Fraud”: How CME Chief Terry Duffy Called Out SBF in March

Terry Duffy – CEO of CME Group – says he was never fooled by the praise surrounding former FTX chief Sam Bankman-Fried. 

In a recent interview, the CEO revealed that he called Bankman-Fried (SBF) a fraud to his face during an in-person meeting in March. 

Detecting the Fraud

During an interview with CNBC’s On The Tape podcast last week, Duffy recounted his encounter with SBF 7 months ago. Meeting for the first time, SBF told Duffy that his goal was to compete with the CME, but in the crypto realm. 

In response, Duffy offered to simply give SBF his crypto franchises worth $30 million. In return, he would ask to be the young billionaire’s risk manager. “I’ll clear it to make sure it’s done properly,” said Duffy.

Bankman-Fried outright refused his offer, due to a requirement of deploying Duffy’s risk management framework. His answer immediately sounded the alarm for Duffy:

“You’re a fraud. You’re an absolute fraud,” Duffy said to SBF, showing suspicion over his reported $26 billion net worth and altruistic ideals. “If you’re an altruist, how come there’s not a $10 billion dollar donation going to somebody right at this moment in time?” 

Terry Duffy Interview CME CEO
Terry Duffy. Source: Business Insider

Promising to expose Bankman-Fried, Duffy later testified to congress about the risks with the CEO’s crypto exchange. The CME chief claimed congress and regulators were “singing hymns” over SBF, and hostile to the criticisms he brought up. 

“You could lose 85% to 90% of your value overnight,” he warned, urging congress not to implement SBF’s framework in any asset class. His prediction proved more correct than he expected, with FTX Token (FTT) losing over 95% of its value since the start of November.

Red Flags

In a follow-up interview with CNBC on Tuesday, Duffy noted various other “red flags” about SBF, such as his relationship with politicians. The former CEO traveled with former CFTC chair Mark Wetjen, and has donated millions of dollars to Democrats.

Duffy was suspicious of where SBF was sourcing capital to fund various politicians’ congressional races or to buy his staff multiple expensive homes.

Nevertheless, the CME chief said he wasn’t surprised by the people who believed Bankman-Fried was an honest actor. FTX had numerous influential celebrities promoting its brand including Tom Brady – who is now being investigated for his endorsements.  

“I’m not surprised by the baggy shorts and the big T-shirt,” added Duffy, “because it’s a gimmick – and most people that wear a gimmick are also selling a gimmick.”

FTX went bankrupt in early November when it was unable to handle overwhelming withdrawal demand from its customers. Many including Coinbase CEO Brian Armstrong suspect that the company lent out customer deposits without permission. 

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Former Kraken CEO Jesse Powell also believes SBF flashed numerous red flags, including his sudden rise to prominence and media exposure. 

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