Aaryamann Shrivastava
FXStreet
- FTX founder Sam Bankman-Fried posted the "FTX Pre-Mortem Overview" discussing FTX international's insolvency.
- Sam Bankman-Fried stated that he offered to contribute all of his Robinhood shares provided the bankruptcy team covered his legal fees.
- Sam Bankman-Fried also alleged that FTX lawyers pressured him to make John Ray the new CEO, which hindered his attempt at recovering customers' funds.
FTX saga noted another major development on Thursday as the former CEO of the bankrupt exchange, Sam Bankman-Fried (SBF), came forward to present his side of the story in a blog post titled “FTX Pre-Mortem Overview”. Discussing the downfall of FTX and its sister company Alameda Research, the disgraced founder explained that he stands innocent against all the charges placed on him.
FTX founder Sam Bankman-Fried reappears
FTX bankruptcy proceedings under the management of new CEO John Ray have led to the recovery of almost $5 billion. However, according to the former head, Sam Bankman-Fried, the decision to make Ray the CEO was pressured on him, which resulted in the failure to recover funds to make customers whole again.
In a blog post published by Bankman-Fried on January 12, FTX's ex-CEO discussed the developments that took place over the last couple of months that led to the bankruptcy of the cryptocurrency exchange.
Talking about the bankruptcy, Sam Bankman-Fried stated that FTX's US arm was always solvent with over $350 million in cash. However, FTX international's position was tied to Alameda Research, regarding which Bankman-Fried said,
"...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."
As per Sam Bankman-Fried, FTX international had roughly $8 billion worth of assets of varying liquidity at the time of John Ray's appointment. The former executive maintained his stand about the possibility of recovering customer funds by raising money as he said,
"I believe that, had FTX International been given a few weeks, it could likely have utilized its illiquid assets and equity to raise enough financing to make customers substantially whole."
He also blamed Binance founder and CEO ChangPeng Zhao (CZ) for the collapse of the cryptocurrency exchange. According to Bankman-Fried, the tweet put out by CZ talking about Binance’s FTT sale led to widespread panic selling, resulting in the crash and subsequent liquidity crunch.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ Binance (@cz_binance) November 6, 2022
Sam Bankman-Fried claims he didn’t stash funds
The ex-CEO reiterated his innocence in the post, stating that neither did he steal any funds nor did he stash away billions of dollars. He said that pretty much all of his assets "were and are still utilizable" to support FTX customers. He added,
"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."
Earlier this week, as reported by FXStreet, FTX bankruptcy lawyers recovered over $5 billion in assets varying from cash to liquid cryptocurrency and liquid investment securities. The lawyer also blamed Alameda for spending customers' money on buying planes and throwing parties.
However, Sam Bankman-Fried, in his post, stated that Alameda lost money due to the market crash as it was not hedged adequately, drawing a similarity to Three Arrows Capital.
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