Sam Bankman-Fried issues a Substack newsletter to defend himself

Sam Bankman-Fried issues a Substack newsletter to defend himself
Written by admin


Crypto founders fail Sam Bankman-Fried launched a newsletter Thursday offering a detailed defense of her actions on the popular platform.

“I didn’t steal funds and I certainly didn’t hide billions,” Bankman-Fried said of how he ran the now-bankrupt cryptocurrency firm FTX. millions of customers.

It was his biggest public defense since the Justice Department given Last month, the Securities and Exchange Commission and the Commodity Futures Trading Commission filed eight counts of fraud, money laundering and other charges against Bankman-Fried and related civil complaints. Collectively, they described the chief executive as long using client money to finance his own risky investments, personal purchases and campaign donations at FTX.

Bankman-Fried has pleaded not guilty to charges brought by the Department of Justice by the United States Attorney for the Southern District of New York. He is currently under house arrest at his parents’ home in Palo Alto, California, and will be arraigned on the charges later this year.

Bankman-Fried did not return a message seeking comment, nor did her attorney, Mark Cohen. A spokesman for the Southern District of New York declined to comment.

Bankman-Fried’s comments came in a post on Thursday New account at Substack, the newsletter platform I created. The missive provided more details to back up what the 30-year-old former CEO has said in media interviews. was arrested in Decemberspeeches in which he denies knowingly doing anything unethical or illegal.

Bankman-Fried wrote Thursday that FTX’s post-bankruptcy financial picture was less bleak than many of the company’s legal and government critics claimed.

For example, “FTX US is fully solvent and always has been,” writing about the company’s American division. “It was ridiculous that FTX US users weren’t completely covered and still haven’t gotten their money back.”

But while the lawyers for the reconstructed FTX he said In bankruptcy court Tuesday, they say they have recovered about $5 billion to help pay back creditors, a process they say has not been straightforward.

John J. Ray, the veteran bankruptcy attorney brought in to clean up FTX, said it would take months to track down the many accounts and subsidiaries amid a string of incomplete bookkeeping. And 8 billion dollars is impossible to calculate, according to researchers.

Bankman-Fried says he was careless at FTX. Prosecutors say it was a hoax

With so many customers waiting for money they couldn’t get, Bankman-Fried described the losses as simply the ups and downs of the markets, not any crime.

“No funds were stolen. Alameda lost money due to a market crash that was not adequately hedged,” he wrote, detailing the company’s investment strategy and path to bankruptcy.

Although Alameda is a firm he helped found and run by people close to him, Bankman-Fried tried to portray FTX as a discrete victim of Alameda’s problems, similar to how many independent crypto companies have been affected by the broader contagion. market.

“FTX was affected [by the Alameda challenges] Voyager and others as before,” he wrote, referring to the cryptocurrency manager went under Last summer, due to the fall in value of another cryptocurrency company, Terraform Labs.

But the SEC in its complaint he called Bankman-Fried “final decision maker” in Alameda. It also alleged that he made “undisclosed venture capital investments, lavish real estate purchases and large political donations” with client deposits to the FTX sister firm, painting a picture of a company that was far from a helpless bystander in Alameda’s troubles.

To help their case, prosecutors have the help of former Bankman-Fried associates Caroline Ellison and Gary Wang, both of whom have pleaded guilty and cooperates with the government.

Bankman-Fried gave a series of interviews after the bankruptcy, including a long session With ABC’s George Stephanopoulos. He is there too he continued to tweet since he was indicted by prosecutors in the SDNY a month ago.

It was consistent throughout the story: O he says Little does Alameda know, let alone control, its funds. And he would try to help people get their money back.

Thursday’s mission continued this theme. “I dedicate almost all of my personal assets to clients,” he wrote, without explaining how that would work or what it meant.

But he offered more financial details than in previous statements. Bankman-Fried focused on how Alameda went bankrupt and largely chose to ignore the allegations against him — that he illegally used FTX clients’ money to prop up a hedge fund.

Bankman-Fried Substack wrote in her post that she wanted to set the record straight with her testimony. seven to give The House Financial Services Committee on Dec. 13. “Unfortunately, the Justice Department moved to arrest me the day before, pre-empting my testimony in a completely different news cycle,” he wrote about his arrest in the Bahamas, where he was living at the time and where the FTX is based.

While Bankman-Fried tried to portray herself as a helpful figure Thursday, Ray said the mess was the chief executive’s own doing.

“Never in my career have I seen such a complete failure of corporate controls and such a complete lack of reliable financial information,” he said. said last month How FTX and Alameda were governed under Bankman-Fried.

Legal experts have repeatedly said the cryptocurrency chief’s press statements were a bad idea, providing fodder for prosecutors to recreate timelines and use comments against him.

It wasn’t known if Substack was being launched as an ongoing newsletter or a one-off update, but Bankman-Fried concluded her post by noting what readers can expect. more than his writings.

“I have more to say,” I wrote. “But at least it’s a start.”

About the author


Leave a Comment