Accused crypto juggler Bankman-Fried pleads innocent
“I didn’t hide billions”
Sam Bankman-Fried has been charged with fraud in the crypto exchange bankruptcy case. He commented on the allegations on his blog. And particularly blackens his ex-girlfriend.
Sam Bankman Fried. The founder of the bankrupt crypto exchange FTX defends himself against allegations of fraud in a public blog.
Jean Claude RaemyEditor Economics
What was he thinking? Sam Bankman-Fried (30) comments on his Substack platform in detail about the allegations and charges against him – well aware that anything written can be used against him in court.
Specifically, Bankman-Fried is accused of fraud in connection with the bankruptcy of the crypto exchange FTX he founded. He has already pleaded not guilty, was extradited from the Bahamas to the United States, and is awaiting trial there in house arrest with his parents. This should start in October. It was recently announced that five billion dollars in assets were found on FTX, including cash.
At Substack, Bankman-Fried now states: “I haven’t stolen anything, and I certainly haven’t hidden billions.” Instead, under the title “FTX Pre-Mortem Overview”, he lists in detail how the current situation came about.
Alameda and Binance are guilty
He blames Alameda for the collapse of FTX International – FTX USA is still doing well. He founded this crypto hedge fund in 2017, but has not been active in it for two years. CEO was his ex-girlfriend Caroline Ellison (30). This has already pleaded guilty and blackened Bankman-Fried. This in turn explains that Alameda simply failed to adequately hedge against the risk of an extreme market crash. When the sister company began to falter, FTX pulled with it.
According to Bankman-Fried, this went as follows: “In November 2022, an extreme, rapid and targeted crash triggered by the CEO of Binance led to the bankruptcy of Alameda.” A tweet by Binance CEO Changpeng “CZ” Zhao triggered a “run to the bank”. A reaction in which investors withdraw their money due to concerns about a company. Interesting: Bankman-Fried also mentions Credit Suisse, against which a similar “character assassination” was attempted. In contrast to FTX, however, this was able to stem the outflow of money early enough.
FTX, on the other hand, was very quickly forced to go under bankruptcy protection. “Had FTX been given a few weeks to raise the necessary liquidity, I believe the company would have been able to largely compensate customers,” he writes.
Bankman-Fried has made many of these claims before. The core of this is that Alameda’s liquidity crisis is not due to misconduct, but to general market turbulence. And that FTX International and Alameda are perfectly legitimate, profitable companies. In doing so, however, Bankman-Fried often relies on estimates rather than concrete data.
Whether he is guilty will have to be decided in court.