'You're an absolute fraud': CME Group CEO says he called out Sam Bankman-Fried the first time he met him, months before FTX's collapse

• CME Group CEO Terry Duffy said he called Sam Bankman-Fried a "absolute fraud" in March.
• "Right away my suspicions were up," Duffy told CNBC on Tuesday.

Terry Duffy, the chief executive of CME Group, said the first time he met Sam Bankman-Fried he called him out as a fraud.

"Right away my suspicions were up," Duffy told CNBC on Tuesday, after he initially recounted his meeting with Bankman-Fried last week on the "On the Tape" podcast. "And then when I met with [Bankman-Fried], I knew right away this a joke, this is absolutely going nowhere."

Before his meeting with Bankman-Fried, Duffy said he met with the head of the Commodities Futures Trading Commission to ask why it was considering Bankman-Fried's application to ease regulatory rules for his trading model, as it involved great risk.

FTX filed for bankruptcy and Bankman-Fried stepped down as CEO on November 11. Commentators have compared the collapse of the company to the 2008 downfall of Lehman Brothers.

"You're a fraud, you're an absolute fraud," Duffy said he told Bankman-Fried at the meeting in March earlier this year.

The crypto exchange is now starting its bankruptcy hearing in Delaware, and FTX could have more than a million creditors it owes money to.

Duffy said Bankman-Fried, while sitting at a bar, asked him why he wouldn't let FTX grow.

"You could see there were so many different red flags," he said. "I told my team this had nothing to do with crypto. He wanted to list all asset classes, mine, the Intercontinental, the CME and everybody else's, under his model which would have been, as I said, a biblical disaster."

Now, Duffy said he wants to know where the money came from for things like FTX's political donations, luxury homes, and other purchases. He wonders if those are customer funds or revenue from the crypto exchange.

"Who's money were they spending, unsuspecting clients'?" Duffy said. "A lot of questions need to be answered."