SBF says FTX was solvent, blames bankruptcy team for ‘decimating’ firm

Sam Bankman-Fried, the convicted founder of collapsed FTX crypto exchange, claimed in a newly uploaded statement that Alameda Research and FTX were “never insolvent” and that customer funds could have been repaid in full shortly after its 2022 liquidity crisis.

In a 15-page document dated Sept. 30, Bankman-Fried and his team claimed FTX entered the November 2022 liquidity crisis with $25 billion in assets and $16 billion in equity value, which was more than enough to cover the $8 billion in customer withdrawal demands.

Bankman-Fried had previously attempted to make the same argument during his trial, although he was barred from introducing evidence backing his claim that FTX and hedge fund Alameda were solvent.

“The crisis FTX faced in November 2022 was a liquidity crisis, i.e., a sudden shortage of cash,” the document said. “It was on track to be resolved by the end of the month — that is, until FTX’s external counsel seized control.”

In the new document, Bankman-Fried accused the bankruptcy lawyers and new CEO John J. Ray III of seizing control of the company and steering it into unnecessary bankruptcy proceedings, which he claimed delayed repayments and significantly reduced the amount.

The document claimed that bankruptcy lawyers were “heavily incentivized” to file for bankruptcy and misrepresented the company as “hopelessly insolvent” and a “dumpster fire,” while disregarding company records and understating its assets.

It further alleged the debtors paid nearly $1 billion in fees to consultants, discarded $7 billion in FTT (FTX’s native token) and sold assets below market value, which the document claimed could have been saved for distribution to stakeholders.

“Today, those assets together with the FTX equity held by Alameda would be worth approximately $136 billion — if the Debtors hadn’t decimated the company,” the document said.

The Block has reached out to the FTX bankruptcy estate for comment.

Seeking pardon

FTX’s collapse in 2022 remains one of the largest crypto scandals.

Court evidence showed Alameda received a “secret backdoor” exemption from FTX’s risk engine, allowing it to borrow unlimited customer funds without collateral. This allowed Alameda to take on risky positions, including heavy holdings of FTX’s native token FTT, which artificially inflated its balance sheet.

When the backdoor operations were revealed, a mass bank run forced FTX to halt payouts, exposing an $8 billion shortfall. The collapse triggered a broader liquidity crunch across the industry, eventually wiping out roughly $200 billion in crypto market capitalization.

A month after the November bankruptcy filing, Bankman-Fried was arrested in the Bahamas. In November 2023, he was convicted on multiple counts of fraud and conspiracy for stealing billions of dollars in customer funds from FTX. He is currently serving a 25-year prison sentence and is appealing the conviction.

Bankman-Fried and his family have repeatedly claimed that the FTX co-founder was wrongfully convicted, and are seeking clemency from President Donald Trump, who has pardoned Silk Road creator Ross Ulbricht and Binance Co-founder Changpeng Zhao.

Earlier this month, Bankman-Fried wrote in a post on social media platform GETTR that his arrest was politically motivated by the Biden administration after he shifted his political donations toward Republicans.