FTX founder and former CEO Sam Bankman-Fried launched his own Substack newsletter today, in a very unusual move for someone who was recently arrested and is confronted eight counts of US criminal charges.
In a post titled “FTX pre-mortem overviewBankman-Fried maintains his innocence around the collapse and bankruptcy of FTX, a cryptocurrency exchange he founded in 2019 that went on to raise $2 billion in funding and achieve a valuation of a whopping $32 billion.
I didn’t steal money and I certainly didn’t stash away billions. Almost all of my assets were and still are usable to support FTX clients. For example, I offered to gift nearly all of my personal shares in Robinhood to clients — or 100%, if the Chapter 11 team honored my D&O legal fees.
When Bankman-Fried stepped down from FTX in November, Enron veteran John J. Ray III was appointed as the new CEO.
The 30-year-old ex-billionaire insists that had he not been “forced” to go bankrupt, the company could have reimbursed all of its customers. He wrote: “There were numerous potential funding offers, including signed post-Chapter 11 LOIs that totaled more than $4 billion. I believe that if FTX International had been given a few weeks, it probably could have used its illiquid assets and equity to raise enough funding to make customers substantially healthy.
On January 3, Bankman-Fried pleaded not guilty to all eight charges, including bank fraud, conspiracy to commit money laundering and conspiracy to misuse customer funds, among others. Bankman-Fried could face up to 115 years in prison if convicted on all charges. His trial date is set for October 2, 2023.
Last month, a US judge released Bankman-Fried on $250 million bail after he was extradited to the US from the Bahamas. The bail package allowed Bankman-Fried to remain under house arrest at his parents’ home in Palo Alto, California.
In the Substack, Bankman-Fried went on to say what he described as “a record of the balance sheet of FTX US from the time I handed it over.
He went on to say:
If FTX had been given a few weeks to raise the necessary liquidity, I think it could have made clients substantially healthy. I didn’t realize then that Sullivan & Cromwell – by putting pressure on Mr. Ray and file for Chapter 11, including for solvent companies like FTX US – potentially destroying those efforts. I still think if FTX International were to reboot today, there would be a real opportunity to make customers substantially whole. And even without that there are significant assets available to customers.
I have unfortunately been slow to respond to public misconceptions and material inaccuracies. It took me a while to get what I could – I don’t have access to much of the relevant data, much of it for a company (Alameda) that I wasn’t running at the time.
This isn’t the first time the disgraced founder has publicly voiced his thoughts. In November, he said in one series of tweets which was FTX International looking for liquidity and was talking to a “number of players”. He then spoke to reporter Andrew Ross Sorkin for a DealBook event in December from an undisclosed location in the Bahamas, a discussion his legal team “very much” disapproved of, he told Sorkin with a boyish grin. He too