FTX founder and former CEO Sam Bankman-Fried launched his own Substack newsletter today, a very unusual move for someone who was recently arrested and faces eight counts of US criminal charges.
In a post titled “FTX Pre-Mortem Overview,” Bankman-Fried maintains his innocence in connection with the collapse and bankruptcy of FTX, a cryptocurrency exchange he founded in 2019 that later raised $2 billion in funding and a valuation from an unbelievable 32 dollars reached billion.
He wrote:
I didn’t steal any funds, and I certainly didn’t hide billions. Almost all of my assets were and still are usable to hedge FTX clients. For example, I’ve offered to donate almost all of my personal interest in Robinhood to clients — or 100% if the Chapter 11 team would redeem my D&O indemnification.
When Bankman-Fried resigned from FTX in November, Enron’s turnaround veteran John J. Ray III was named the new CEO.
The 30-year-old former billionaire continues to insist the company would have been able to pay back all of its customers had it not been “forced” to file for bankruptcy. He wrote, “There have been numerous potential funding offers – including signed LOIs post Chapter 11 filing totaling over $4 billion. I believe had FTX International had a few weeks it could probably have used its illiquid assets and equity to raise enough funding to essentially complete the clients.”
On Jan. 3, Bankman-Fried pleaded not guilty to all eight counts, including wire fraud, conspiracy to commit money laundering and conspiracy to misappropriate customer funds, among others. Bankman-Fried faces up to 115 years in prison if convicted on all charges. His trial date is set for October 2, 2023.
Last month, a US judge released Bankman-Fried on $250 million bail after he was extradited to America from the Bahamas. The bail package allowed Bankman-Fried to remain under house arrest at his parents’ home in Palo Alto, California.
In the substack, Bankman-Fried further shared what he described as “a record of FTX US’ balance sheet at the time of delivery.”
Photo credit: SBF substack
He went on to say:
If FTX had had a few weeks to raise the necessary liquidity, I believe it would have been able to essentially complete clients. Little did I realize at the time that by pressurizing Mr. Ray to convene and file Chapter 11, even for solvent companies like FTX US, Sullivan & Cromwell would potentially thwart those efforts. I still think that if FTX International were to relaunch today, there would be a real opportunity to essentially make clients complete. And even without that there is significant Assets available to customers.
Unfortunately, I’ve been slow to respond to public misperceptions and material misstatements. It took me some time to piece together what I could – I don’t have access to much of the relevant data, much of which is for a company (Alameda) I didn’t run at the time.
This isn’t the first time the disgraced founder has shared his thoughts publicly. In November he said in a series of tweets that FTX International was looking to raise liquidity and was in talks with a “number of players”. Then in December, he spoke from an undisclosed location in the Bahamas to reporter Andrew Ross Sorkin for a DealBook event, a discussion his legal team “very” disapproved of, he told Sorkin with a boyish grin.
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