Sam Bankman Fried once again took to social media from prison, clearing up what he described as “10 myths” surrounding the collapse of cryptocurrency exchange FTX and his subsequent conviction.
Use former CEO statement To challenge prosecutors, the bankruptcy process, media coverage, and even the conduct of his trial.
Sam Bankman Fried denies FTX bankruptcy
Bankman-Fried began to question the claim that FTX was insolvent and $8 billion in customer funds had disappeared. He compared statements made by prosecutors to jurors with representations made to court by bankrupt debtors, and that his claim of solvency was false and that he had lost billions in client money.
He added that media reports reinforced the message that the money had disappeared. However, in his version of events, FTX was solvent and is now paying out between 119% and 143% of their claims to customers.
Bankman Fried also dismissed persistent rumors about a lavish corporate culture. Addressing the “multiple orgies” allegations, Bankman-Fried categorically denied that such behavior occurred.
He insisted he didn’t party or take vacations, noting that while FTX owns a penthouse, he personally rented only 10% of it for six months for $50,000. He emphasized that his personal spending and political donations were funded by his profits and were less than those profits.
The secret “back door” to Alameda
Regarding the events that led to FTX’s bankruptcy, Bankman-Fried disputed the narrative he provided because it was unable to meet increasing withdrawal requests. According to him, there were offers to cover the lack of liquidity and stabilize the platform.
He claimed that within three days, financing proposals were on the table and withdrawals began to resume, but the lawyers nevertheless continued to file for bankruptcy.
The former FTX CEO also addressed the structure of the exchange’s trading platform, Alameda Research, saying that it is unrealistic to expect a margin exchange to be completely liquid at all times.
He explained that margin trading involves clients – including Alameda Research – who choose to lend and borrow through a shared collateral pool. He confirmed that most of the assets on the exchange were part of this lending program and that FTX had sufficient liquidity to cover assets outside of it.
Another major accusation he disputed was that he created a secret “back door” into FTX’s systems to move funds to Alameda. Bankman Fried denied the existence of such a mechanism, saying the account features in question had legitimate purposes and were not used to allow the Alameda company to borrow more customers than it lent.
Hopes of pardon are fading
Much of his statement focused on his trial. Bankman-Fried claimed he did not receive a fair hearing, arguing that once the Department of Justice (DOJ) under former President Joe Biden and the bankrupt debtors took control of FTX, they controlled the narrative and access to the documents and witness pool.
Bankman-Fried also accused Judge Lewis Kaplan of restricting his ability to defend himself, including imposing a gag order, revoking bail before trial, and excluding evidence related to FTX’s solvency and counsel’s advice.
Regarding the cancellation of bail, Bankman-Fried asserted that this stemmed from his exercise of his First Amendment rights and attempts to help bankrupt debtors, not from intimidation of witnesses.
This statement comes as Bankman-Fried continues to pursue a new trial in New York. Speculation that he might receive a presidential pardon from President Donald Trump — similar to the pardon granted to former Binance CEO Changpeng Zhao — has largely died down.
Featured image from OpenArt, chart from TradingView.com
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