What was he thinking? Sam Bankman-Fried (30) comments in detail on the allegations and charges brought against him on the Substack platform – well aware that anything written can be used against him in court.
Notably, Bankman-Fried has been accused of fraud in connection with the bankruptcy of his crypto exchange FTX. He has already pleaded not guilty, has been extradited from the Bahamas to the United States, and is awaiting trial there with his family under house arrest. This should start in October. It was recently announced that FTX has $5 billion in assets, including cash.
On Substack, Bankman-Fried now says: “I didn’t steal anything and I certainly didn’t hide billions of dollars.” Instead, under the heading “FTX Pre-Mortem Overview,” it lists in detail how the current situation has come to be.
Alameda and Binance are guilty
He blames Alameda for the collapse of FTX International – FTX USA is still doing well. He founded this crypto hedge fund in 2017, but has been inactive for two years. The CEO was his ex-girlfriend Caroline Ellison (30). This already admitted his guilt and blackened Bankman-Fried. This explains why Alameda has not adequately protected against the risk of an extreme market crash. When the sister company began to falter, FTX pulled in with it.
According to Bankman-Fried, the story went like this: “In November 2022, an extreme, rapid and targeted crash triggered by the Binance CEO led to the bankruptcy of Alameda.” A tweet from Binance CEO Changpeng “CZ” Zhao triggered the “bank run”. A backlash where investors withdrew their money because of concerns about a company. Interesting: Bankman-Fried also mentions Credit Suisse, where a similar “character assassination” was attempted. However, unlike FTX, this was able to stop the coin’s outflow early enough.
FTX, on the other hand, had to go under bankruptcy protection very quickly. “I believe that if FTX had been given a few weeks to increase the required liquidity, the company could have largely compensated customers,” he writes.
And now?
Bankman-Fried has made many of these claims before. The crux of this is that Alameda’s liquidity crisis is not caused by abuse, but by general market turmoil. And that FTX International and Alameda are completely legitimate, profitable companies. But in doing so, Bankman-Fried often relies on estimates rather than concrete data.
The court will decide whether he is guilty or not.