Sam Bankman-Fred, former CEO of FTX, has largely denied the allegations against him in his “before death overview” about the bankruptcy of the cryptocurrency exchange.
On January 12, Bankman-Fried stated that there is a way forward for clients of some companies under the FTX umbrella to be repossessed after the company goes bankrupt. According to the former CEO, FTX US was “fully solvent” at the time the company filed for Chapter 11 bankruptcy with about $350 million in cash on hand.
Bankman-Fried added that FTX International had about $8 billion in assets at the time John Ray took over as CEO and pledged to use “nearly all” of his personal assets in an effort to pay users back. After FTX filed for bankruptcy, the former CEO claimed to have only $100,000 in his bank account and later relied on his parents to post bail at his home as part of his criminal case.
Regarding allegations that Alameda had access to FTX users’ funds without their knowledge or consent — at the heart of the criminal charges against him — Bankman-Fried denied any involvement:
“I didn’t steal money and I certainly didn’t keep billions. Almost all of my assets were and still are usable to support FTX clients.”
– SBF (SBF_FTX) January 12, 2023
Bankman-Fried named the law firm Sullivan & Crowell and the US general counsel of FTX as parties that led him to appoint John Ray as CEO of FTX prior to the company’s bankruptcy, apparently stopping the path to making affected users “substantially whole.” He blamed the FTX bankruptcy on the 2022 crypto market crash and a “month-long PR campaign against FTX” by Binance CEO Changpeng Zhao.
“As Alameda became illiquid, so did FTX International, because Alameda had an open margin position in FTX; no money was stolen,” Bankman Fried said. Alameda lost money on a market crash that was not properly hedged — as did Three Arrows and others this year.
Bankman-Fried pleaded not guilty to eight criminal charges in her case, including alleged violations of campaign finance laws and wire fraud. Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have already pleaded guilty to related charges. The SBF trial is scheduled to begin in October.