I Didn’t Steal Funds Or Stash Away Billions: Sam Bankman-Fried

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Disgraced FTX founder Sam Bankman-Fried, in an astonishing and highly unusual blog post, stated that he did not steal any funds or stash away billions as claimed. 

He blamed Binance CEO Changpeng Zhao for orchestrating the liquidity crisis that led to the eventual fall of FTX and its associated businesses. 

An Unusual Blog Post 

Sam Bankman-Fried, the former CEO of FTX, has claimed that he did not steal any money or have billions stashed away. He made the claims in a blog post published a month after his arrest by authorities on charges of fraud. Federal prosecutors have stated that Bankman-Fried and his associates stole billions of dollars from FTX users to pay the debts of Alameda Research, a crypto-based hedge fund and FTX’s sister concern. Prosecutors also allege that customer funds were used to purchase real estate and donate to various US political campaigns. 

“I didn’t steal funds, and I certainly didn’t stash billions away.”

Bankman-Fried has pleaded not guilty to all charges against him. However, The former CEO’s closest associates have pleaded guilty to defrauding users and have agreed to cooperate with authorities. Former Alameda Research executive, Caroline Ellison, stated in her plea that Bankman-Fried and other FTX executives received billions of dollars in secret loans from Alameda Research. 

A Lot More To Say 

Typically, defense lawyers always advise their clients to refrain from making any public statements before any trial, let alone one as significant as this. In the substack post, Bankman-Fried did not directly address the charges brought against him by prosecutors but stated that he had a lot more to say. Charges against Bankman-Fried are primarily that he misled investors, users, and lenders about the finances of FTX and Alameda research. 

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Bankman-Fried’s spokesperson, and the US Attorney’s office in Manhattan, have so far declined to comment on the matter. 

Significant Sum Recovered 

In the Substack post, Bankman-Fried stated that FTX’s US wing is fully solvent, and the parent company also has billions of dollars in assets. He further added that there was a good chance customers could be compensated. Bankman-Fried wrote, 

“If it were to reboot, I believe there is a real chance that customers could be made substantially whole.”

Bankman-Fried’s comments came after a lawyer for the FTX exchange told the federal bankruptcy court in Delaware that the exchange had located around $5 billion in liquid assets. The lawyer further added that it planned to sell several non-strategic investments it had made. These investments had a book value of around $4.6 billion. 

This figure did not include the assets seized by the Securities and Exchange Commission of the Bahamas, where FTX was headquartered. While authorities in the Bahamas claim they had seized around $3.5 billion, FTX has claimed the value of the seized funds to be around $170 million.

Alameda Research, FTX Fell To Extreme Market Crash 

According to Bankman-Fried, Alameda Research fell to an extreme market crash in the cryptocurrency ecosystem after failing to hedge against it adequately. He wrote, 

“As Alameda became illiquid, FTX International did as well because Alameda had a margin position open on FTX.”

He alleged that Alameda Research and its assets were the subject of a targeted attack by Binance CEO Changpeng Zhao, accusing him of orchestrating the liquidity crisis that led to the eventual downfall of FTX. In November, Zhao tweeted that Binance was planning to dump its holdings of FTX’s native FTT token. The CEO pointed to a report which stated that Alameda Research’s assets were primarily comprised of FTT tokens, sparking a run of massive withdrawals from FTX. 

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This direct attack on Zhao was markedly different from previous occasions when Bankman-Friend had only hinted at Zhao’s role in the FTX collapse.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: ryptodaily.co.uk