Sam Bankman-Fried Claims FTX Was Solvent, Blames Lawyers for Collapse

Disgraced FTX founder Sam Bankman-Fried (SBF) has claimed in a brand new report that his bankrupt cryptocurrency empire was by no means bancrupt. He alleged that chapter legal professionals, not fraud, are in charge for the collapse that shook international crypto markets in 2022.

The report drew sharp responses from blockchain investigators rapidly. Crypto sleuth ZachXBT accused SBF of deceptive individuals once more and attempting to shift blame.

Behind The FTX Collapse

The report, titled “FTX: Where Did The Money Go?,” by Bankman-Fried and his team, was posted on X (previously Twitter). In the report, he outlined how $20 billion from seven million FTX prospects was $8 billion in debt during the November 2022 collapse.

“For a few years, prospects bought nothing again. Where did these billions go? The reply is that they by no means left. FTX was by no means bancrupt. There have at all times been sufficient belongings to repay all prospects—in full, in form—each in November 2022, and right this moment,” he wrote.

Bankman-Fried burdened that the trade allegedly had round $15 billion in belongings on the time. He cites inner filings from FTX’s 2023 presentation to collectors, which listed belongings that included crypto holdings, enterprise investments, and actual property.

The report famous that, after a two-year delay, the property revealed that each one prospects can be repaid at 119% to 143% of the unique quantity. SBF added that about 98% of collectors have already acquired 120%, and that after paying out $8 billion in claims and $1 billion in authorized charges, the property nonetheless has $8 billion left. He presents this end result as proof that FTX at all times had sufficient belongings to make prospects entire.

However, the report additionally acknowledged ongoing criticism that repayments are being made in US greenback equivalents based mostly on November 2022 costs, not in-kind crypto. That means prospects who held Bitcoin or Ethereum on the time are receiving far lower than the present market worth.

“It can be pure to imagine that the two-year delay meant it was unimaginable for FTX to repay prospects in 2022, that the dollarization occurred as a result of FTX lacked enough belongings to repay prospects in form, and that FTX had little left over for fairness traders after making prospects entire. But because it seems, FTX at all times had enough belongings to repay all prospects, in form, and supply vital worth to fairness holders as nicely. That is what would have occurred if legal professionals hadn’t taken over FTX,” the report reads.

SBF Blames The Legal Team For FTX’s Downfall

Bankman-Fried additionally laid the collapse squarely at the feet of FTX’s authorized advisors. The report blames Sullivan & Cromwell (S&C), the legislation agency that dealt with FTX’s chapter, and John J. Ray III, who changed him as FTX’s CEO after the collapse.

He accused the agency of “seizing management” of the trade in November 2022 and submitting for chapter, despite the fact that he claims the corporate was solvent.

“It was on observe to be resolved by the tip of the month—that’s, till FTX’s exterior counsel seized management. FTX was by no means bankrupt, even when its legal professionals positioned it into chapter 11,” SBF wrote.

According to Bankman-Fried, S&C, and Ray acted out of self-interest. They sought management over FTX’s billions in belongings in an effort to acquire giant skilled charges. He cites court docket filings displaying that the chapter course of has already price round $1 billion in authorized and consultancy charges.

The doc additionally claims that inside hours of taking up, Ray dismissed key FTX employees who understood the corporate’s programs and declared the corporate “hopelessly bancrupt.”

Bankman-Fried argues that if the exchange had continued working, FTX’s belongings — together with holdings in Solana, Robinhood, Anthropic, and Sui — would have been price about $136 billion right this moment. Instead, he alleges, the chapter staff bought these belongings at “fire-sale” costs, wiping out greater than $120 billion in potential worth.

“That’s over $120 billion of misplaced worth up to now. $120 billion that will have gone to FTX’s stakeholders if the Debtors had merely achieved nothing in any respect,” the report highlighted.

Among the examples he lists:

• FTX’s stake in Anthropic, an AI startup now valued at $183 billion, was bought for lower than $1 billion.
• The staff bought the corporate’s Robinhood shares for roughly $600 million however can be price greater than $7 billion right this moment.
• They additionally offloaded about 58 million Solana tokens for $3.3 billion — lower than half their present estimated worth.

The report additional claims that the property “discarded” FTT, FTX’s native token, labeling it nugatory. Nonetheless, it nonetheless trades with a market capitalization above $300 million.

By Bankman-Fried’s calculations, these gross sales, mixed with authorities settlements {and professional} charges, amounted to $138 billion in misplaced worth — cash he insists may have gone to prospects and fairness traders.

The report paints a vastly totally different image from the narrative offered at Bankman-Fried’s 2023 criminal trial. The court docket convicted him of fraud and sentenced him to 25 years in jail.

Crypto Investigator Accuses SBF of Twisting Facts

Meanwhile, the crypto group didn’t obtain Bankman-Fried’s newest remarks nicely. In a reply, outstanding blockchain investigator ZachXBT wrote:

“The collectors have been paid from crypto costs on the time of the FTX Nov 2022 chapter and never at present costs which brought on customers to take huge losses in the event that they held belongings like SOL or BTC. Illiquid investments price extra right this moment are only a coincidence. You clearly don’t have any discovered out of your time spent in jail so far and repeat the identical misinformation like earlier than.”

The sleuth additionally argued that the previous FTX CEO was exploiting the truth that almost each FTX-related asset and funding has surged in worth for the reason that market’s lowest level in November 2022.

He noted that this rebound doesn’t change the fact that, on the time of the chapter, FTX lacked the liquidity to meet buyer withdrawals. According to him, Bankman-Fried is making an attempt to shift blame.

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