Sam Bankman-Fried, the disgraced founder of the now-bankrupt cryptocurrency exchange FTX, is attempting to redefine the narrative of the firm’s collapse from his prison cell, asserting FTX was never insolvent and attributing its “destruction” to bankruptcy lawyers.
The former CEO, serving a 25-year sentence for fraud, shared a 15-page document titled “FTX: Where the money went?” on his X account, which he claims is managed by a friend. In the document, Bankman-Fried argues that the November 2022 crisis was merely a liquidity shortfall, not a lack of assets.
This is where the money went. https://t.co/HVRwEw5Z1k https://t.co/5DrA13L5YE pic.twitter.com/O6q77DvmTn
— SBF (@SBF_FTX) June 7, 2024
He claims FTX possessed $25 billion in assets and $16 billion in equity at the time of the crisis, more than sufficient to cover the $8 billion in customer withdrawal requests. Bankman-Fried alleges the situation was “on its way to being resolved by the end of the month” but was derailed by external legal counsel and John J. Ray III, the new CEO appointed during bankruptcy proceedings.
Bankman-Fried accuses the legal team of charging nearly $1 billion in fees, discarding $7 billion in FTT tokens—FTX’s native cryptocurrency—and selling other assets significantly below market value. He estimates that assets, including stakes in Solana and Anthropic, could be worth $136 billion today but “evaporated.”
He noted that 98% of creditors have already received 120% of their funds, projecting all will eventually recover between 119% and 143%. Bankman-Fried maintained that “after covering $8 billion in claims and $1 billion in legal fees, the bankrupt estate still has $8 billion.”
In follow-up posts on X, Bankman-Fried conceded he “should have trusted my instincts and fought the lawyers,” admitting he “yielded” due to “inverse arrogance.”
The FTX scandal erupted in November 2022 following a CoinDesk report that Alameda Research, FTX’s sister trading firm, had a “backdoor” to use customer funds without collateral. This revelation triggered a massive bank run, leading to withdrawal halts and a broader liquidity crisis that wiped out hundreds of billions of dollars from the cryptocurrency market.
Bankman-Fried was arrested in the Bahamas a month later, extradited to the U.S., and convicted in 2023 on seven counts of fraud and conspiracy. He is currently appealing his sentence.
His latest document is perceived as part of a broader effort to secure a presidential pardon from figures like Donald Trump, although prediction markets like Kalshi assign only a 10% chance of this occurring. The X post garnered over 1 million views within hours, though most responses were hostile.
On-chain investigator ZachXBT criticized Bankman-Fried, stating, “Creditors were paid with 2022 prices, not current. You have learned nothing in prison.” Richard Heart added, “Betting stolen money doesn’t cancel the theft.”
Other commenters accused Bankman-Fried of misusing funds and employing “legal doublespeak.” The FTX bankruptcy team has not yet issued a public comment on Bankman-Fried’s claims.