According to the CEO of CME Group, Terry Duffy, the executive met with former FTX CEO Sam Bankman-Fried (SBF) last March at a conference, and Duffy ended up calling the FTX frontman a “fraud.” When Duffy sat down with SBF, the former FTX executive said his end goal was to compete with CME Group.
Last March CME Group’s Terry Duffy Called SBF a ‘Fraud’ and Says He Was the Only One Besides ICE to Call ‘BS on These Clowns’
Terry Duffy, the chief executive officer of CME Group, the world’s largest derivatives exchange, recently sat down with the hosts of the podcast “On The Tape” and discussed the recent FTX collapse. Duffy explained that last March he sat down with the former FTX CEO, Sam Bankman-Fried (SBF), and they discussed competition. Duffy asked the former FTX executive what his end goal was and SBF replied “well, I want to compete with you.” Duffy said he replied “Great, I’m all for competition, what do you want to do?”
Duffy explained that SBF said he wanted to compete with CME in crypto, so Duffy said: “I’ll give you one better, how about I give you my crypto franchises worth $30 million and we’ll go from there?” SBF replied to Duffy by asking the CME Group CEO what he wanted in exchange for the deal. “You know what I want,” Duffy said to SBF. “Let me be your risk manager, I’ll clear it to make sure it’s done properly.” SBF responded that the CME Group CEO would not deploy his model, and Duffy said “your model is crap.” Duffy added:
Why would I deploy a model that’s going to introduce risk to the system? Of course I’m not going to deploy your model.
Duffy then said that SBF turned him down flat out and the CME Group CEO told the former FTX CEO: “You know what? You’re a fraud. You’re an absolute fraud. You are supposedly worth $26 billion and you’re an altruist. If you are an altruist at $26 billion, how come there’s not a $10 billion donation going to someone right at this moment in time?” The CME Group CEO continued:
How ’bout a $15 billion donation? You know what? My net worth doesn’t start with any BS. I’ll give you three-to-one [odds] that I have more money than you. I tell you what, I’ll give you four-to-one [odds] that I got more money in my right pocket than your net worth. You’re a fraud and I’m going to make sure we get this out there.
Duffy Stressed That FTX’s Idea Was ‘Deficient and Poses Significant Risk to Market Stability,’ Elon Musk Says SBF Set off His BS Detector
After meeting with SBF, Duffy said he went to speak in front of Congress, right around the time when FTX was looking for approval from the US Commodity Futures Trading Commission (CFTC) to become a derivatives clearing organization. Duffy noted that he was “berated” during the congressional hearing but he would not back down. “I said you could lose 85% to 95% of your value overnight and [SBF] will not commit to keeping this just crypto,” Duffy remarked on the podcast. “He wants it deployed across all asset classes” and Duffy further stressed that SBF’s model would lead to a “biblical disaster.”
“FTX’s proposal is glaringly deficient and poses [a] significant risk to market stability and market participants,” Duffy wrote about the subject in mid-May 2022.
During the first week of October, reports said that CME Group was looking to register as a direct futures commission merchant (FCM). FTX’s application with the CFTC was still waiting for approval but now the application has been scrapped. The 64-year-old Duffy recently sat down with Bloomberg after the FTX collapse and told the news publication that he won’t stop cryptocurrency futures trading just because of “one bad actor.”
“I’m not prepared to say I’d delist it,” Duffy said. “We’ve been at the cutting edge of innovative products, but what we don’t do is do it in a reckless manner,” the CME Group executive added. During the interview with the hosts of the podcast “On The Tape,” Duffy further called FTX executives a bunch of clowns. “So I am upset by this (the FTX situation),” Duffy remarked. “But I am a measured upset. I’m a very measured upset, because nobody else was calling BS on these clowns but me. My friends at the Intercontinental Exchange (ICE) are the only other exchange that said ‘we do not like this as well.’”
In addition to CME Group’s Duffy, Tesla and Twitter executive Elon Musk told the public that SBF set off his BS detector. After someone shared a conversation between Musk and an FTX representative, in the conversation Musk asked: “Does Sam actually have $3B liquid?” When Musk saw someone share the text conversation on Twitter he verified that the text was real. “Accurate. He set off my BS detector, which is why I did not think he had $3B,” Musk tweeted in response.
What do you think about CME Group’s Terry Duffy calling SBF an “absolute fraud?” Let us know what you think about this subject in the comments section below.
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