While SBF covered many areas in his substack letter, one thing was echoed over and again, and that is the fact that he did not steal users’ funds.
Sam Bankman-Fried (SBF), the founder and former Chief Executive Officer of bankrupt FTX Derivatives Exchange has maintained his innocence with respect to stealing the trading platform users’ funds as alleged by Federal Prosecutors. In a Thursday morning Substack letter, Bankman-Fried fried explained that the collapse of FTX and its sister trading firm Alameda Research is a function of the broader turmoil that the financial industry has recorded over the past year.
In the letter, SBF noted that over the course of 2021, the Net Asset Value of Alameda Research grew to $100 billion with $8 billion of net borrowing (leverage), and $7 billion of liquidity on hand. Amid this growth, SBF acknowledged that Alameda Research failed to hedge its market exposure and by implication, the firm lost approximately 80% of its value over that time span.
The disgraced CEO argued that his comment bordered on the insolvency of FTX International as FTX US, against the claims by prosecutors, is fully solvent and is in a position to repay all of its customers.
“FTX US remains fully solvent and should be able to return all customers’ funds. FTX International has many billions of dollars of assets, and I am dedicating nearly all of my personal assets to customers,” he wrote.
SBF claimed the run toward the filing of bankruptcy by FTX was precipitated by the CEO of Binance Changpeng “CZ” Zhao who tweeted back on November 6 that he will be selling off the exchange’s stash of FTT tokens. To Sam Bankman-Fried, this is a months-long PR effort to get FTX down.
SBF is awaiting trial on 8 count charges including those bordering on money laundering and fraud, a case that was solidified when his two top comrades, Caroline Ellison and Gary Wang both pleaded guilty to similar charges. While both of them could still change their pleas later on, SBF pleaded not guilty right away and per his recent revelations, he may have just the right defense to substantiate his stance.
SBF Maintains He Did Not Steal User’s Funds
While SBF covered many areas in his substack letter, one thing was echoed over and again, and that is the fact that he did not steal users’ funds.
“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. I have, for instance, offered to contribute nearly all of my personal shares in Robinhood to customers–or 100%, if the Chapter 11 team would honor my D&O legal expense indemnification,” he said.
While the industry believes SBF misappropriated funds, the 30-year-old bemoaned the confusion between liquidators and regulators with respect to separating customers of solvent FTX US and those of insolvent FTX International. According to him, FTX International, even in its insolvency, is supposed to be able to muster assets if properly managed to repay all of its creditors.
SBF’s trial is set for October 2 this year in New York.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
