SBF Says FTX Solvent, Blames Bankruptcy Team

Sam Bankman-Fried claimed in a new document that FTX entered its 2022 liquidity crisis with sufficient assets to repay customers and accused bankruptcy lawyers of steering the firm into unnecessary proceedings.

What's the scoop?

• Solvency Argument: The 15-page filing stated FTX had $25 billion in assets and $16 billion in equity, exceeding the $8 billion in withdrawal demands.
• Liquidity vs. Insolvency: Bankman-Fried described the November 2022 issue as a cash shortage resolvable by month's end, until external counsel took control.
• Bankruptcy Accusations: The document alleged lawyers misrepresented FTX as insolvent, ignored records, and collected nearly $1 billion in fees.
• Asset Handling: Debtors discarded $7 billion in FTT tokens and sold assets below value, reducing potential $136 billion in stakeholder distributions.
• Collapse Background: Court evidence showed Alameda borrowed unlimited customer funds via a risk engine exemption, leading to an $8 billion shortfall and industry-wide losses.
• Clemency Push: Bankman-Fried is seeking pardon from President Trump, following his actions on Ross Ulbricht and Changpeng Zhao.

Bankless Take:

While there is strong possibility that the swiftness and severity of justice rendered on SBF was politically motivated, the fact stands that, whether the exchange was illiquid or insolvent, it improperly borrowed customer funds and caused its collapse. With SBF pushing this new narrative, it's not a stretch to think he's plotting a return to the industry, if he gets out.