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.
The Aftermath of FTX’s Downfall
The sudden collapse of the crypto exchange has left the industry stunned.
- A Spectacular Rise and Fall: Who is Sam Bankman-Fried and how did he become the face of crypto? “The Daily” charted the spectacular rise and fall of the man behind FTX.
- How FTX Operated: FTX called itself an exchange. But it was vastly different from stock exchanges, which are highly regulated and barred from engaging in many of the activities that the crypto company pursued.
- Bankman-Fried’s Bail Negotiations: Intense legal wrangling led to the disgraced crypto mogul paying virtually nothing to live with his parents ahead of his upcoming trial.
- Ryan Salame: The former FTX executive, who told regulators about wrongdoing at the exchange and was a big Republican donor, has emerged as a central player in the scandal.
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.