Sam Bankman-Fried, the former crypto star turned alleged white-collar criminal, has spoken out for the first time since his arrest last month, publishing a lengthy blog post that appears to lay out his defense against fraud charges.
“I didn’t steal funds and I certainly didn’t hoard billions,” he writes in a newly launched newsletter.
Bankman-Fried is under house arrest at her parents’ home in Palo Alto, California, pending trial. He has pleaded not guilty to multiple federal fraud and conspiracy charges related to the collapse of his crypto empire.
In what he calls a “pre-mortem overview” of the FTX meltdown, Bankman-Fried reiterates allegations he made in November after the cryptocurrency exchange filed for bankruptcy and before he was arrested.
Among the main topics:
- He places the blame squarely on Alameda, the crypto hedge fund he founded in 2017. “Alameda failed to protect itself sufficiently against the risk of an extreme market downturn: the hundred billion assets had only a few billion dollars in hedges” he says.
- He wasn’t in charge of the Alameda. Bankman-Fried reiterates that he has not been at the helm of Alameda for “the last few years”, having named his ex-girlfriend Caroline Ellison as sole CEO in 2022.
- Alameda and FTX’s problems were not unique, writes Bankman-Fried. He often contextualizes the companies’ decline as part of an industry-wide downturn that has engulfed a number of other companies, including Three Arrows Capital, Voyager and Celsius – all of which went bankrupt in the so-called crypto winter, a broad decline in the value of digital assets, similar to a market down.
- Alameda’s contagion then spread to FTX “because Alameda had an open margin position in FTX; and the run on the bank turned this illiquidity into insolvency.
- FTX was pressured into filing for Chapter 11 by the law firm Sullivan & Cromwell, he says. “Had FTX had a few weeks to build up the necessary liquidity, I believe it would have been able to make clients substantially whole,” he writes. “At the time, I was unaware that Sullivan & Cromwell would potentially nullify these efforts.” Representatives for Sullivan & Cromwell did not immediately respond to a request for comment.
Some of Bankman-Fried’s allegations directly contradict US prosecutors’ allegations that funds from FTX clients were being diverted to plug holes in Alameda, in violation of FTX’s terms of service.
Source: CNN Brasil
A journalist with over 7 years of experience in the news industry, currently working at World Stock Market as an author for the Entertainment section and also contributing to the Economics or finance section on a part-time basis. Has a passion for Entertainment and fashion topics, and has put in a lot of research and effort to provide accurate information to readers.
