Sam Bankman-Fried Makes First Detailed Response to Fraud Charges

Sam Bankman-Fried Makes First Detailed Response to Fraud Charges

Mr. Bankman-Fried’s statement also blamed FTX’s failure partly on an attack by its largest rival, Binance.

“No funds were stolen,” he wrote.

But even as he outlined Alameda’s finances, Mr. Bankman-Fried also asserted that he hadn’t run the firm “for the past few years” and didn’t have access to all its financial information. Regulators and prosecutors have argued that he was in fact intimately involved in Alameda’s management and orchestrated a system that allowed the company to borrow essentially an unlimited amount of money from FTX’s pool of customer deposits.

His statement did not address the guilty pleas from two of his former top executives, Caroline Ellison and Gary Wang, both of whom are cooperating with prosecutors. Ms. Ellison, who once dated Mr. Bankman-Fried, was the head of Alameda when the firm collapsed, and Mr. Wang founded FTX with Mr. Bankman-Fried.

On Wednesday, a bankruptcy lawyer for FTX told a federal judge that the exchange had recovered more than $5 billion of cash and crypto assets — considerably more than the company had previously said it had on hand. The announcement raised hopes that FTX might be able to return some money to its millions of creditors and customers around the world.

Andrew Dietderich, an attorney with the law firm Sullivan & Cromwell, also told the judge overseeing FTX’s bankruptcy in Delaware that the legal team had identified more than nine million customer accounts at the crypto exchange.

In an email after the bankruptcy hearing, Mr. Dietderich said that of the $5 billion in newly recovered assets, approximately $1.7 billion was in cash.

He said the newly recovered assets did not include roughly $20 million in cash and $484 million in shares in the online trading company Robinhood that federal prosecutors had seized from a separate company that Mr. Bankman-Fried set up in Antigua. He also said FTX’s new management believes the Robinhood shares and the seized cash ultimately should be distributed to FTX creditors.

Add a Comment