Sam Bankman-Fried Says Handing FTX to CEO John Ray Was ‘Biggest Mistake’ in Prison Interview
Sam Bankman-Fried acknowledged in unique jail interviews that handing FTX to CEO John Ray III was “the one largest mistake I made by far,” claiming he signed over management at 4:24 am on November 11, 2022, underneath excessive strain from Sullivan & Cromwell and firm advisers.
According to a report from Mother Jones, the convicted FTX founder maintains that he by no means defrauded anybody and that the corporate was by no means bankrupt, regardless of a jury discovering him responsible of seven counts of fraud and cash laundering in November 2023.
Bankman-Fried is serving a 25-year sentence at Federal Correctional Institution Terminal Island in Los Angeles and has been ordered to pay $11 billion in restitution.
His mother and father, Stanford regulation students Joe Bankman and Barbara Fried, are making ready to attraction his conviction, arguing that Sullivan & Cromwell wrestled FTX away from him, put in Ray, and profited handsomely whereas enjoying a crucial function in his imprisonment.
According to the report, the regulation agency has billed almost $250 million in authorized charges all through the chapter course of, whereas Ray will obtain a $30 million bonus in addition to his $1,575 hourly charge and a $3 million completion payment.
Total bankruptcy costs are expected to exceed $1 billion, making it one of the vital costly in U.S. historical past.
John Ray has known as SBF’s claims about FTX’s solvency “categorically, callously, and demonstrably false,” stating he and Sullivan & Cromwell salvaged billions from the wreckage to repay prospects.
By final October, Ray had recovered not less than $16 billion, with most collectors anticipated to obtain 100% of their November 2022 account values plus curiosity.
Sullivan & Cromwell’s Role Draws Scrutiny From Senators and Bankruptcy Experts
Sullivan & Cromwell had represented FTX on not less than 20 events since 2021, incomes over $8.5 million in charges earlier than the collapse.
Some attorneys from the agency had joined FTX’s in-house authorized employees, together with Ryne Miller, General Counsel of FTX.US, who was a former employees legal professional on the Commodity Futures Trading Commission.
Days earlier than the chapter submitting, Sullivan & Cromwell attorneys consulted with Miller. They reported accounting issues to the U.S. Attorney’s workplace for the Southern District of New York, the SEC, and the CFTC.
SBF claims these discussions occurred with out his data.
Ray’s crew later acknowledged that Sullivan & Cromwell’s pre-bankruptcy outreach was of “crucial significance to the pace with which federal prosecutors have been in a position to cost and arrest Mr. Bankman-Fried.”
Bipartisan senators, together with Elizabeth Warren and Thom Tillis, wrote to the chapter choose in January 2023, questioning Ray’s hiring of Sullivan & Cromwell, given its in depth historical past with FTX.
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— Cryptonews.com (@cryptonews) September 24, 2025
The senators famous the agency suggested FTX for years, main to its collapse, whereas claiming to be “disinterested” in conducting the fraud investigation.
Temple University chapter skilled Jonathan Lipson filed a court docket transient supporting the appointment of a particular examiner to examine whether or not Sullivan & Cromwell violated moral duties.
Lipson questioned whether or not the agency violated ethics by promising SBF a reorganization function “whereas concurrently searching for to induce his prosecution.”
An impartial examiner was ultimately appointed over Sullivan & Cromwell’s objections, although the mandate was restricted to compiling and summarizing accomplished investigations reasonably than conducting new interviews or reviewing main paperwork.
The examiner decided Sullivan & Cromwell’s previous work didn’t disqualify it from representing FTX via Chapter 11.
Creditors Fight Bankruptcy Fees While Bitcoin Holdings Surge 600%
Sunil Kavuri, a former adviser at Deutsche Bank and Morgan Stanley, had $2 million in crypto property frozen on FTX when the alternate collapsed.
He launched a class-action go well with in opposition to movie star spokespeople, together with Tom Brady, Shaquille O’Neal, and Shohei Ohtani, with O’Neal settling for $1.8 million in May.
Kavuri turned a self-appointed champion for collectors, constructing an internet group that tracks chapter developments.
Italian creditor Lidia Favario, who misplaced her financial savings from a automotive crash settlement, filed quite a few objections concentrating on Sullivan & Cromwell’s charges, noting one skilled spent over $1,000 on taxis in a single week.
Creditors argued that they need to get well digital property at their present values reasonably than the November 2022 frozen money values.
An account containing $50,000 in bitcoin would now be price round $350,000, representing roughly 600% appreciation.
SBF maintains that FTX had almost $15 billion in web property when it collapsed and estimates the property can be price not less than $119 billion at the moment if the chapter crew had executed nothing.
His authorized crew plans to middle his attraction on questions surrounding FTX’s solvency, arguing that the jury by no means noticed proof that the corporate had enough property to repay its prospects.
Ray bought FTX-owned LedgerX to traders, together with Zach Dexter, the FTX.US chief who urged SBF to step apart, for $50 million after FTX paid almost $300 million to purchase it in 2021.
Sullivan & Cromwell’s Andrew Dietderich known as LedgerX a “horrible funding,” although the agency had helped dealer the unique deal and billed $1.5 million for that work.
FTX’s stake in Anthropic netted greater than $1.3 billion throughout the chapter. By late September, the FTX Estate had distributed almost $8 billion to collectors.
Oral arguments for Bankman-Fried’s attraction are scheduled for November 4 on the U.S. Court of Appeals for the Second Circuit in New York. However, federal acquittal charges stay traditionally low at lower than 1%.
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