Fallen Crypto King Sam Bankman-Fried in new blog says Binance CEO targeted FTX
Sam Bankman-Fried says he's not guilty in new blog. Photo: Representative
The fallen King of Crypto, Sam Bankman-Fried, spoke up for the first time in a blog post, after his arrest in the FTX fraud case. He repeated the same thing he’s been saying since the collapse of the crypto trading firm, that he did not steal the billions of dollars.
What does the blog post say? SBF is currently in the US, out of jail on a $250 million bond, and under house arrest at his Stanford professor parents' home in Palo Alto, California.
- SBF published the balance sheets of FTX and its sister firm Alameda Research from 2021 and 2022 in the blog post to make his point.
- He claimed that while Alameda Research did fault by not sufficiently hedging against the risk of an extreme market crash, FTX could have still survived bankruptcy and paid back its customers if it was only given a few more weeks.
Accuses Binance CEO of toppling FTX: For the first time, SBF directly accused Binance CEO Changpeng Zhao of forcing bankruptcy on FTX and targetting him and his company.
- In November, Zhao announced that Binance would dump its FTX token holdings citing the CoinDesk report on Alameda Research's curious balance sheet. This led to massive withdrawals from FTX, which eventually resulted in its collapse.
- Zhao in his defence told TechCrunch that while their announcement was the last straw for FTX, the company was never strong enough from the beginning.
- Sam Bankman-Fried claims that FTX would have been able to pay back the missing $8 billion if not for the media trial and Zhao's targetted attack spooking others.
- He also claimed that the company held around $8 billion in assets "of varying liquidity" when new CEO John Ray III took over in November.
- However, the new FTX CEO calls the claims ridiculous and says there was "a complete failure of corporate controls" and "a complete absence of trustworthy financial information" at FTX and Alameda Research.
What's happening in the case right now? FTX was valued at $32 billion a year ago until it filed for bankruptcy in November 2022. Around $8 billion in customer funds are missing, with some amount moving on Ethereum.
- On the other hand, FTX during the bankruptcy hearing said that it has managed to locate over $5 billion in assets which will be used to repay creditors.
Where is the former FTX core team? SBF's former colleagues and friends from the FTX and Alameda core team - FTX co-founder Gary Wang and Alameda Research ex-CEO Caroline Ellison - have both pleaded guilty to fraud charges.
- In contrast, SBF pleads innocence. Wang and Ellison's statements can be used for their lighter sentences if they help with the investigation.
- SBF says he's been isolated from his colleagues and friends and has not spoken to Ellison, who also happens to be his ex-girlfriend, and Wang.
- SBF says his main aim is to make customers whole or pay them back their lost money. But interestingly, SBF's lawyers asked for his seized $450 million stake in stock trading app Robinhood to fund the fallen crypto king's legal fees.
- But SBF clarifies this by saying that he's willing to contribute all of his personal shares in Robinhood to pay his customers.