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• Brett Harrison, who led the disgraced exchange’s US arm, says he is a victim of fraud too

One of FTX’s former bosses is now out raising money for his new crypto start-up. Yes, Brett Harrison acknowledges he led FTX in the US. But no, Harrison insists, he didn’t have a clue that Sam Bankman-Fried and his inner circle allegedly gambled away customers’ funds.

It’s been less than three months since FTX collapsed in what prosecutors call one of the biggest financial frauds in US history. Now a former top executive is eager to get it behind him and move on to his next big thing.

Yes, Brett Harrison acknowledges he led FTX US, the crypto exchange’s American arm, and was one of its public faces before stepping down in September.

But no, Harrison insists, he didn’t have a clue that Sam Bankman-Fried and his inner circle allegedly gambled away customers’ funds in the market. In fact, Harrison says he’s a victim just like more than a million other creditors lined up in bankruptcy court, frustrated that he too might never get back any of the money he invested with the exchange.

Now the 34-year-old is stepping back into the spotlight to drum up interest in his new start-up, a software company that aims to make it easier for big Wall Street firms to trade crypto.

So far, he’s managed to raise a pittance compared with the multibillion-dollar valuation FTX once commanded. He has raised $5m from investors including Coinbase Ventures and Circle Ventures out of $10m he had hoped to attract. That he’s raised even that much shows the willingness of some in the crypto community to offer a fresh start — and it’s something, considering that venture capital investments in crypto are at their lowest level in nearly two years.

“It’s been a pretty chilly crypto winter for everyone and seeing a raise get done — and seeing excitement from larger well-known crypto investors — has given people hope,” Harrison said in an interview this week.

It takes a certain degree of audacity, or perhaps denial, to try to turn the page even as the shock waves of FTX’s implosion continue to reverberate months after its November downfall, and as prosecutors widen their dragnet. It was a seminal event for crypto, one that tainted its image, burnt investors and left some of the industry’s biggest companies teetering on the brink. Last month Genesis Global, once one of the biggest crypto lenders, filed for bankruptcy. Others are retrenching and cutting staff. customers There’s’also money uncertainty was about how many were responsible for what happened at FTX, which collapsed after allegedly used to cover bad bets by Bankman-Fried’s hedge fund, Alameda Research. Bankman-Fried is awaiting trial on fraud charges after pleading not guilty.

NOT CHARGED

Other top executives in Bankman-Fried’s orbit took different paths. Former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang both admitted to participating in fraud. Former FTX Digital Markets co-CEO Ryan Salame and Nishad Singh, who oversaw engineering at FTX, have both worked with authorities, according to court records and informed sources.

Harrison would not say whether he had helped investigators. “I’m very happy to help and co-operate with the investigation in any way that I can,” he said.

Harrison, who worked in Chicago, has not been charged with wrongdoing and said he was unaware of what was happening in Bankman-Fried’s inner circle in FTX’s Bahamas headquarters.

In a long thread on Twitter in mid-January, Harrison said he clashed with Bankman-Fried months into his tenure and “never could have guessed” that the company’s disorganised structure was rooted in a “multibillion-dollar fraud”.

In response to the thread, Bankman-Fried said in a statement to Bloomberg that he strongly disagreed with what Harrison said but did not wish to get in a public argument with him.

Harrison said in an interview on Wednesday that he hasn’t spoken to Bankman-Fried since months before his September departure from FTX US. He said he wasn’t involved in key deals made by FTX US, including when the company extended a $400m credit line to troubled crypto lender BlockFi and secured the option to buy the company during BankmanFried’s billion-dollar bailout spree last summer.

“There were a number of different acquisitions or deals in which I would find out about them from the news, rather than find out from them internally and that was very frustrating,” Harrison said.

He said he pushed for greater separation between FTX and FTX US and fought for dividing legal and compliance teams, as well as software developers. He said the companies had servers at different locations, as well as separate bank accounts and crypto wallets, and customer accounts were kept apart from the company’s operating accounts.’

He said he didn’t publicly raise his concerns about FTX because he attributed the company s organisational problems to “growing pains”.

“Those weren’t concerns that something nefarious was going on,” Harrison said.

It’s been difficult to move past the stigma of FTX so soon. Several venture capitalists who were pitched on the new company, called Architect, passed because of risks of being associated with a former FTX executive, despite speaking positively about Harrison.

DYSFUNCTION

“You can’t have it both ways,” said Cory Klippsten, the CEO of Swan Bitcoin, a financial services start-up, who is dubious of Harrison’s efforts to move beyond FTX. “It’s extremely weird to on the one hand claim to be a competent person of high integrity, and on the other hand not do anything whatsoever to raise a flag publicly about the obvious massive dysfunction at FTX.”

Harrison was recruited to FTX by Bankman-Fried in 2021 as the cryptocurrency bubble was peaking. Harrison, with bachelor’s and master’s degrees in computer science from Harvard, had known the FTX co-founder from Jane Street Group, the quantitative trading firm where Harrison became the head of trading systems technology. At the time, Harrison was overseeing a technology group at Citadel Securities, one of the world’s biggest market makers.

After becoming president of FTX US that May, Harrison quickly turned into one of the company’s most visible faces as spot crypto trading on the platform surged to more than $67bn that year. It expanded into trading in non-fungible tokens under his watch and acquired LedgerX, a crypto derivatives exchange that’s one of the few remaining solvent pieces of FTX and was a large part of the company’s regulatory push to change derivatives trading in the US.

But Harrison said he clashed with Bankman-Fried and unsuccessfully pushed for the US operations to have more independence from the Bahamas headquarters. In April 2022, he said he complained formally about the company’s organisational structure and decided to leave soon after. He stepped down that September.

Since then, Harrison founded Architect, which he hoped would be valued at about $100m. Among the investors was SkyBridge Capital founder Anthony Scaramucci, who sold a 30% stake in his company to Bankman-Fried weeks before the crypto exchange’s collapse.

“I think we’ll have a longterm positive effect on the industry,” Harrison said of his new venture.

SO FAR, HARRISON HAS MANAGED TO RAISE A PITTANCE COMPARED WITH THE MULTIBILLION VALUATION FTX ONCE COMMANDED