Although SBF covered a lot of ground in his letter to substack, one point was hammered home over and over again, and that was the fact that he did not steal money from users.
Sam Bankman-Fried (SBF), the creator and former Chief Executive Officer of the bankrupt FTX Derivatives Exchange, has defended his innocence concerning the allegations made by Federal Prosecutors that he stole the cash of the trading platform customers.
In a statement (1) sent out on Thursday morning, the company indicated that the failure of FTX and its sister trading firm, Alameda Research, is a result of the larger instability that the financial industry has experienced over the previous year.
In the letter, SBF mentioned that during 2021, Alameda Research's Net Asset Value increased to $100 billion, with $8 billion of net borrowed money, and $7 billion of liquid assets on hand. This was mentioned in conjunction with the fact that the company had a total of $7 billion in liquid assets.
Despite this expansion, SBF admitted that Alameda Research did not hedge its market exposure successfully. As a result, the company lost about 80% of its value over this period.
In his defense, the disgraced CEO of FTX International said that his remark brought the company dangerously close to collapse, even though FTX US is, contrary to the assertions made by the prosecutors, totally solvent and is in a position to repay all of its clients.
"FTX US is in a strong financial position and should be able to repay all cash to their respective consumers. "I am dedicating nearly all of my personal assets to customers," he wrote. "FTX International has many billions of dollars of assets, and I am dedicating nearly all of my personal assets to customers."
According to SBF, the CEO of Binance, Changpeng "CZ" Zhao, was the one who started the chain of events that led to FTX filing for bankruptcy. Zhao tweeted on November 6 that he would be selling off the exchange's cache of FTT tokens, prompting SBF to make their claim. Sam Bankman-Fried sees this as a public relations campaign that will take several months to bring down FTX.
SBF is awaiting trial on eight accusations, some of which border on money laundering and fraud. The case against SBF was strengthened when two of his top colleagues, Caroline Ellison and Gary Wang, pled guilty to charges comparable to those against SBF.
SBF pleaded not guilty immediately away, and based on his recent revelations, he may have just the perfect defense to substantiate his stance. Even though both of them might change their plea later on, SBF pleaded innocence immediately.
SBF Asserts His Innocence
Even though SBF went over a lot of ground in his letter to substack, one point was hammered home over and over again, and that was the assertion that he did not steal money from users.
"I did not commit theft, and I most certainly did not hide away billions of dollars. The vast majority of my resources could have been put to use to backstop FTX customers and still can. I have, for example, offered to provide nearly all of my personal shares in Robinhood to consumers–or even all of them, if the Chapter 11 team would honor my D&O legal expenditure indemnification," he stated. "I have offered to contribute almost all of my personal shares in Robinhood to customers."
The 30-year-old criticized the confusion between liquidators and authorities for differentiating clients of solvent FTX US and those of insolvent FTX International. While the industry believes that SBF misused funds, the mess was lamented by the 30-year-old.
Even though the company is bankrupt, he claims that FTX International should still be able to repay all of its debtors with the assets it possesses, provided the company's management is competent.
The trial for SBF is scheduled to begin on October 2 of this year in New York.