Sam Bankman Fried Revives FTX Defense with Solvency Claims

Sam Bankman-Fried (SBF) has returned to social media with a detailed document that challenges the narrative surrounding the collapse of his cryptocurrency exchange FTX. Posted on his X account late Thursday, the 15-page file asserts that the platform maintained sufficient assets to cover all customer obligations at the time of its downfall in November 2022. The brief message he wrote on his post reads simply, “This is where the money went,” followed by a link to the Google Drive document filled with tables outlining asset valuations. This move comes more than a year after Bankman-Fried began serving a 25-year prison sentence for fraud and related charges.

The former FTX chief executive was convicted in November 2023 on seven counts, including wire fraud and money laundering, stemming from the misuse of customer funds that triggered the exchange’s rapid unraveling. Prosecutors argued that billions in deposits were diverted to sister firm Alameda Research for risky trades and personal expenses, leaving FTX unable to meet withdrawal demands. Sentenced in March 2024, Bankman-Fried has maintained his innocence throughout appeals and now extends that stance through this public doc.

Document Highlights Solvency and Asset Projections

The document delves into financial reconstructions, positing that FTX held approximately $15 billion in assets against $8 billion in liabilities when it filed for bankruptcy, allowing for full customer repayments in cryptocurrency at prevailing 2022 prices. It projects that preserved holdings, including stakes in Solana, Anthropic, and Robinhood shares, could now exceed $136 billion in value, far surpassing the $25 billion total estimated at the collapse. Authors of the filing, which appear to include Bankman-Fried’s input, emphasize a temporary liquidity shortfall rather than outright insolvency as the core issue.

Bankruptcy proceedings under new leadership, including CEO John J. Ray III and law firm Sullivan & Cromwell, receive sharp scrutiny in the text. The paper alleges these professionals misrepresented FTX’s position to justify a full shutdown, leading to asset sales at undervalued prices and nearly $1 billion in legal fees that eroded stakeholder returns. Without this intervention, the document claims, operations could have resumed swiftly, preserving an exchange generating $1 billion annually and enabling repayments exceeding 119% of claims in original assets. Current distributions, nearing completion for 98% of creditors, provide dollar equivalents based on 2022 valuations, which the filing argues shortchanged holders amid subsequent crypto price surges.

This release forms part of a larger effort to recast Bankman-Fried’s legacy, including outreach for a presidential pardon as the Trump administration takes shape. Allies have engaged figures like lawyer Kory Langhofer, connected to the incoming president, and facilitated media appearances such as a jailhouse talk with Tucker Carlson. Prediction markets on platforms like Kalshi and Polymarket peg the pardon odds at around 10%, reflecting skepticism tied to the case’s severity and Bankman-Fried’s unyielding denials. Recent pardons for other crypto figures, including Binance founder Changpeng Zhao, have fueled speculation, though experts note distinct circumstances in those instances.

Critics in the crypto community have swiftly dismantled the document’s premises. Onchain investigator ZachXBT pointed out that repayments stem from 2022 asset values, not today’s highs, resulting in substantial losses for those anticipating crypto recoveries. Two weeks ago, SBF gave a written prison interview with a social media influencer, also claiming FTX was insolvent, which seems to have been a precursor to this document he published. Finance professor Austin Campbell labeled the revisionism as delusional, underscoring proven theft of customer deposits regardless of later windfalls.

The doc’s emergence stirs fresh debate on bankruptcy processes in crypto failures, where rapid asset liquidation often prioritizes creditor protection over long-term value. FTX’s estate has recovered over $16 billion, enabling the ongoing distributions that affirm some operational safeguards worked as intended. Yet Bankman-Fried’s narrative persists in highlighting perceived overreach by advisors, a thread that resonates with those wary of traditional finance’s grip on digital assets.

As FTX repayments continue, affected users weigh the tangible outcomes against these retrospective arguments. The episode shows enduring tensions between innovation’s risks and accountability’s demands. Bankman-Fried’s voice, filtered through proxies from prison, continues to provoke, even as courts and markets render their verdicts on FTX and SBF.