Former FTX CEO Sam Bankman-Fried has largely denied the allegations against him in a “pre-mortem overview” of the crypto exchange’s insolvency.
In a Jan. 12 post on Substack, Bankman-Fried claimed there was a path forward for customers of certain companies under the FTX umbrella to be made whole following the firm’s bankruptcy. According to the former CEO, FTX US had been “fully solvent” at the time the firm filed for Chapter 11 bankruptcy, with roughly $350 million in cash on hand.
Bankman-Fried added that FTX International had roughly $8 billion in assets at the time John Ray took over as CEO, and he pledged to use “nearly all” of his personal assets in an effort to reimburse users. Following FTX filing for bankruptcy, the former CEO claimed to have had only $100,000 in his bank account, and later relied on his parents to put up their home for bail as part of his criminal case.
In regard to the allegations Alameda had access to FTX user funds without their knowledge or consent — at the center of the criminal charges against him — Bankman-Fried denied any involvement:
“I didn’t steal funds, and I certainly didn’t stash billions away. Nearly all of my assets were and still are utilizable to backstop FTX customers.”
Bankman-Fried pointed to law firm Sullivan & Crowell and the FTX US general counsel as parties who pressured him into naming John Ray as the CEO of FTX prior to the firm’s bankruptcy, seemingly disrupting a path toward making affected users “substantially whole.” He largely laid the blame for FTX’s bankruptcy on the crypto market crash of 2022 and a “months-long PR campaign against FTX” by Binance CEO Changpeng Zhao.
“As Alameda became illiquid, FTX International did as well, because Alameda had a margin position open on FTX; and the run on the bank turned that illiquidity into insolvency,” said Bankman-Fried. “No funds were stolen. Alameda lost money due to a market crash it was not adequately hedged for–as Three Arrows and others have this year.”
Bankman-Fried has pleaded not guilty to eight criminal charges in his 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. SBF’s trial is scheduled to begin in October.