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Irish Independent
Irish Independent
Luc Cohen

‘I didn’t steal funds and stash billions away’ – FTX chief Sam Bankman-Fried

Sam Bankman-Fried, founder and chief executive officer of FTX. Photo: Ting Shen/Bloomberg

Sam Bankman-Fried said he did not steal money and blamed the collapse of his now-bankrupt FTX exchange on a broad crash in cryptocurrency markets, in a highly unusual blog post yesterday, a month after his arrest on US fraud charges.

Federal prosecutors in Manhattan in December said Mr Bankman-Fried stole billions of dollars from FTX customers to pay debts for his crypto-focused hedge fund, Alameda Research, purchase lavish real estate, and donate to US political campaigns. He has pleaded not guilty.

The Substack blog post – a rare public statement by a US criminal defendant – amounts to a preview of the defence case Mr Bankman-Fried may present when his trial begins on October 2. “I didn’t steal funds, and I certainly didn’t stash billions away,” Mr Bankman-Fried wrote.

Defence lawyers typically advise clients to stay silent before trial because prosecutors may use their comments against them in court.

A spokesman for Mr Bankman-Fried declined to comment. A spokesman for the US Attorney’s office in Manhattan declined to comment.

In the post, Mr Bankman-Fried did not directly address many of the other charges brought against him by federal prosecutors in Manhattan last month, namely that he misled investors and lenders about the financial conditions of FTX and Alameda.

He wrote that he had “a lot more to say”.

The 30-year-old one-time billionaire wrote that Alameda failed to hedge against an “extreme” crash in the crypto markets, which ultimately came to pass last year.

“As Alameda became illiquid, FTX International did as well, because Alameda had a margin position open on FTX,” Mr Bankman-Fried wrote.

Last month, two of his closest associates pleaded guilty to defrauding the trading platform’s customers and agreed to cooperate with prosecutors’ investigation.

Caroline Ellison, Alameda’s former chief executive, said in her plea hearing that Mr Bankman-Fried and other FTX executives received billions of dollars in secret loans from Alameda.

Mr Bankman-Fried was released on a $250m (€230m) bond in December and put under house arrest at his parents’ Palo Alto, California home, which was pledged as collateral for his return to court.

In the post, Mr Bankman-Fried also said FTX’s US wing is “fully solvent” and that its international unit has many billions of dollars in assets.

“If it were to reboot I believe there is a real chance that customers could be made substantially whole,” he wrote.

The comments came after a lawyer for FTX on Wednesday told a federal bankruptcy court in Delaware that the exchange had located more than $5bn in liquid assets, and that the company plans to sell non-strategic investments that had a book value of $4.6bn.

That does not include assets seized by the Securities Commission of the Bahamas, where FTX was based and where Mr Bankman-Fried lived before he was extradited to the United States.

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