CRIMINAL CRYPTO CAPITALI$M
Sam Bankman-Fried Blogs Like a Crypto Robin Hood, but in Court He's Not So Charitable
Jack Schickler
Thu, January 12, 2023
Sam Bankman-Fried’s surprise Substack post Thursday included these charitable lines: “Nearly all of my assets were and still are utilizable to backstop FTX customers,” he wrote. “I have, for instance, offered to contribute nearly all of my personal shares in Robinhood to customers.”
It sounds like the British folk hero and outlaw of the same name, Robin Hood, who stole from the rich to give to the poor. As Bankman-Fried tells it on Substack, FTX users can have the stake in trading app Robinhood – worth about $450 million, though now seized by the U.S. Department of Justice – that he bought. A nice gesture, surely, as their money remains locked up.
But the swashbuckling hero’s tale is darker in court. In a Jan. 5 document filed with the Delaware bankruptcy court, Bankman-Fried resisted an attempt to transfer the 56 million Robinhood Markets (HOOD) shares to the estate of FTX – arguing both that he needed the funds to pay for his criminal defense and that FTX couldn’t prove he'd acquired the stock fraudulently.
The shares were acquired via a series of loans he and colleague Gary Wang had received from FTX’s trading arm, Alameda Research, Bankman-Fried’s filing said.
That’s legitimate, Bankman-Fried argued; the Substack post said he “didn’t steal funds.” Alameda’s ex-CEO Caroline Ellison has, however, pleaded guilty to charges including commodities fraud, which includes the allegation that she misappropriated FTX customer funds to satisfy Alameda’s souring loans.
Contacted by CoinDesk, a spokesperson for Bankman-Fried declined to comment on when and how he offered to cede the Robinhood securities (as he claimed to do in the Substack post).
SBF thought it was a good idea to start a Substack
The disgraced founder of crypto exchange FTX claims that he didn’t steal funds.
Sam Bankman-Fried
Andrew Kelly / reuters
Kris Holt
·Contributing Reporter
Thu, January 12, 2023
Sam Bankman-Fried is in a world of trouble. He’s facing up to 115 years in prison if he’s convicted of federal fraud and conspiracy charges. And yet the embattled founder of collapsed crypto exchange FTX — who has pleaded not guilty and is out on a $250 million bond while awaiting trial — figured it’d be a great idea to write about his perspective on the saga in a Substack newsletter.
In his first post, which is ostensibly about the collapse of FTX International, Bankman-Fried (aka SBF) claims that “I didn’t steal funds, and I certainly didn’t stash billions away.” SBF notes that FTX US (which serves customers in America) “remains fully solvent and should be able to return all customers’ funds.” He added that FTX International still has billions of dollars in assets and that he is “dedicating nearly all of my personal assets to customers.” SBF, who once had a net worth of approximately $26.5 billion, said at the end of November that he had $100,000 in his bank account, though he pledged to give almost all of his personal shares in Robinhood to customers.
The post covers much of the same ground that SBF has gone over in the myriad interviews he gave between FTX's collapse in November and his arrest last month. He discusses the multiple crypto market crashes in 2022 and a tweet from Binance CEO Changpeng Zhao that sparked a run on FTX’s FTT token and prompted the implosion of his exchange. SBF also writes about how he was pressured to file for Chapter 11 bankruptcy protection for FTX. Meanwhile, he notes that many of the numbers he cites in the post are approximations, since he has been locked out of FTX's systems by those overseeing its bankruptcy proceedings.
What's more interesting is what SBF doesn't address. He does not mention the fact that FTX co-founder Zixiao "Gary" Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to fraud charges and are cooperating with prosecutors.
SBF has continued to give interviews and tweet about the situation while he's out on bail. That's despite the complaint filed against him by the Securities and Exchange Commission citing his tweets and comments he made in an interview in early December. Perhaps this whole Substack thing will turn out to be a mistake too.
The disgraced founder of crypto exchange FTX claims that he didn’t steal funds.
Sam Bankman-Fried
Andrew Kelly / reuters
Kris Holt
·Contributing Reporter
Thu, January 12, 2023
Sam Bankman-Fried is in a world of trouble. He’s facing up to 115 years in prison if he’s convicted of federal fraud and conspiracy charges. And yet the embattled founder of collapsed crypto exchange FTX — who has pleaded not guilty and is out on a $250 million bond while awaiting trial — figured it’d be a great idea to write about his perspective on the saga in a Substack newsletter.
In his first post, which is ostensibly about the collapse of FTX International, Bankman-Fried (aka SBF) claims that “I didn’t steal funds, and I certainly didn’t stash billions away.” SBF notes that FTX US (which serves customers in America) “remains fully solvent and should be able to return all customers’ funds.” He added that FTX International still has billions of dollars in assets and that he is “dedicating nearly all of my personal assets to customers.” SBF, who once had a net worth of approximately $26.5 billion, said at the end of November that he had $100,000 in his bank account, though he pledged to give almost all of his personal shares in Robinhood to customers.
The post covers much of the same ground that SBF has gone over in the myriad interviews he gave between FTX's collapse in November and his arrest last month. He discusses the multiple crypto market crashes in 2022 and a tweet from Binance CEO Changpeng Zhao that sparked a run on FTX’s FTT token and prompted the implosion of his exchange. SBF also writes about how he was pressured to file for Chapter 11 bankruptcy protection for FTX. Meanwhile, he notes that many of the numbers he cites in the post are approximations, since he has been locked out of FTX's systems by those overseeing its bankruptcy proceedings.
What's more interesting is what SBF doesn't address. He does not mention the fact that FTX co-founder Zixiao "Gary" Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to fraud charges and are cooperating with prosecutors.
SBF has continued to give interviews and tweet about the situation while he's out on bail. That's despite the complaint filed against him by the Securities and Exchange Commission citing his tweets and comments he made in an interview in early December. Perhaps this whole Substack thing will turn out to be a mistake too.
Sam Bankman-Fried repeats his claim that he 'didn't steal funds' as he resurfaces on Substack
Sam Tabahriti
Thu, January 12, 2023
Sam Bankman-Fried leaves a court hearing in Manhattan on January 3.Andrew Kelly/Reuters
Sam Bankman-Fried resurfaced Thursday on Substack, days after appearing in a Manhattan court.
He again insisted that he did not "steal funds" from FTX and hadn't "stashed billions away."
The FTX co-founder has pleaded not guilty to eight charges, and a trial is due to start October 2.
Sam Bankman-Fried repeated his assertion that he didn't "steal funds" in what appeared to be an outline of his legal defense as he resurfaced on Substack on Thursday.
The co-founder of collapsed cryptocurrency exchange FTX wrote in Substack post that "I didn't steal funds, and I certainly didn't stash billions away."
Bankman-Fried pleaded not guilty on January 3 to eight charges, including fraud for allegedly using FTX funds to support his hedge fund Alameda Research, buy property, and make political donations worth millions of dollars.
In his Substack post, Bankman-Fried said that the collapse of Alameda was due to "large crypto market crashes," and said he hadn't run the hedge fund for the past few years.
He also said FTX could have reimbursed customers and raised fresh investor cash if it hadn't been forced into bankruptcy: "It's ridiculous that FTX US users haven't been made whole and gotten their funds back yet."
"Alameda's contagion spread to FTX," Bankman-Fried continued. "FTX US remains fully solvent and should be able to return all customers' funds. FTX International has many billions of dollars of assets, and I am dedicating nearly all of my personal assets to customers."
Near the end of his post, Bankman-Fried added: "All of which is to say: no funds were stolen. Alameda lost money due to a market crash it was not adequately hedged for – as Three Arrows and others have this year. And FTX was impacted, as Voyager and others were earlier."
The former FTX CEO was released on a $250 million bond and remains under house arrest at his parents' home in Palo Alto, California.
FTX filed for Chapter 11 bankruptcy protection on November 11 after it imploded, wiping out customer deposits worth billions. Bankman-Fried resigned as CEO the same day.
Bankman-Fried didn't immediately respond to a request for comment from Insider.
Sam Tabahriti
Thu, January 12, 2023
Sam Bankman-Fried leaves a court hearing in Manhattan on January 3.Andrew Kelly/Reuters
Sam Bankman-Fried resurfaced Thursday on Substack, days after appearing in a Manhattan court.
He again insisted that he did not "steal funds" from FTX and hadn't "stashed billions away."
The FTX co-founder has pleaded not guilty to eight charges, and a trial is due to start October 2.
Sam Bankman-Fried repeated his assertion that he didn't "steal funds" in what appeared to be an outline of his legal defense as he resurfaced on Substack on Thursday.
The co-founder of collapsed cryptocurrency exchange FTX wrote in Substack post that "I didn't steal funds, and I certainly didn't stash billions away."
Bankman-Fried pleaded not guilty on January 3 to eight charges, including fraud for allegedly using FTX funds to support his hedge fund Alameda Research, buy property, and make political donations worth millions of dollars.
In his Substack post, Bankman-Fried said that the collapse of Alameda was due to "large crypto market crashes," and said he hadn't run the hedge fund for the past few years.
He also said FTX could have reimbursed customers and raised fresh investor cash if it hadn't been forced into bankruptcy: "It's ridiculous that FTX US users haven't been made whole and gotten their funds back yet."
"Alameda's contagion spread to FTX," Bankman-Fried continued. "FTX US remains fully solvent and should be able to return all customers' funds. FTX International has many billions of dollars of assets, and I am dedicating nearly all of my personal assets to customers."
Near the end of his post, Bankman-Fried added: "All of which is to say: no funds were stolen. Alameda lost money due to a market crash it was not adequately hedged for – as Three Arrows and others have this year. And FTX was impacted, as Voyager and others were earlier."
The former FTX CEO was released on a $250 million bond and remains under house arrest at his parents' home in Palo Alto, California.
FTX filed for Chapter 11 bankruptcy protection on November 11 after it imploded, wiping out customer deposits worth billions. Bankman-Fried resigned as CEO the same day.
Bankman-Fried didn't immediately respond to a request for comment from Insider.
'I didn't steal funds,' Sam Bankman-Fried says in unusual post-arrest blog post
Thu, January 12, 2023
By Luc Cohen
NEW YORK (Reuters) -Sam Bankman-Fried said he did not steal money and blamed the collapse of his now-bankrupt FTX exchange on a broad crash in cryptocurrency markets, in a highly unusual blog post on Thursday, a month after his arrest on U.S. fraud charges.
Federal prosecutors in Manhattan in December said Bankman-Fried stole billions of dollars from FTX customers to pay debts for his crypto-focused hedge fund, Alameda Research, purchase lavish real estate, and donate to U.S. political campaigns.
He has pleaded not guilty. The Substack blog post -- a rare public statement by a U.S. criminal defendant -- amounts to a preview of the defense case Bankman-Fried may present when his trial begins on Oct. 2.
"I didn't steal funds, and I certainly didn't stash billions away," Bankman-Fried wrote.
Defense lawyers typically advise clients to stay silent before trial because prosecutors may use their comments against them in court.
A spokesman for Bankman-Fried declined to comment. A spokesman for the U.S. Attorney's office in Manhattan declined to comment.
In the post, Bankman-Fried did not directly address many of the other charges brought against him by federal prosecutors in Manhattan last month, namely that he misled investors and lenders about the financial conditions of FTX and Alameda. He wrote that he had "a lot more to say."
The 30-year-old onetime billionaire wrote that Alameda failed to hedge against an "extreme" crash in the crypto markets, which ultimately came to pass last year.
"As Alameda became illiquid, FTX International did as well, because Alameda had a margin position open on FTX," Bankman-Fried wrote.
Last month, two of his closest associates pleaded guilty to defrauding the trading platform's customers and agreed to cooperate with prosecutors' investigation.
Caroline Ellison, Alameda's former chief executive, said in her plea hearing that Bankman-Fried and other FTX executives received billions of dollars in secret loans from Alameda.
Bankman-Fried was released on a $250 million bond in December and put under house arrest at his parents' Palo Alto, California home, which was pledged as collateral for his return to court.
$5 BILLION RECOVERED
In the post, Bankman-Fried also said FTX's U.S. wing is "fully solvent" and that its international unit has many billions of dollars in assets.
"If it were to reboot I believe there is a real chance that customers could be made substantially whole," he wrote.
The comments came after a lawyer for FTX on Wednesday told a federal bankruptcy court in Delaware that the exchange had located more than $5 billion in liquid assets, and that the company plans to sell nonstrategic investments that had a book value of $4.6 billion.
That does not include assets seized by the Securities Commission of the Bahamas, where FTX was based and where Bankman-Fried lived before he was extradited to the United States. Bahamian authorities say they have seized $3.5 billion, but FTX says those funds are worth as little as $170 million.
On Wednesday night, Bankman-Fried replied on Twitter to a user named @wassielawyer who said a sale of the FTX exchange was viable. "yup my sense is that is and always has been the best recovery scenario for customers," wrote Bankman-Fried.
FTX declared bankruptcy on Nov. 11, the same day Bankman-Fried stepped down as its chief executive.
(Reporting by Luc Cohen in New York; editing by Amy Stevens, Himani Sarkar and Anna Driver)
Sam Bankman-Fried says both FTX and Alameda were raking in billions in profits in 2021 before token values plunged in crypto winter
Phil Rosen
Thu, January 12, 2023 a
Sam Bankman-Fried, founder of FTX and Alameda ResearchFTX
Sam Bankman-Fried published an extensive Substack article Thursday titled, "FTX Pre-Mortem Overview."
He said both FTX and Alameda Research were netting billions in profits in 2021, before crypto token valuations crashed in 2022.
He noted that "Alameda lost about 80 percent of its assets' value over the course of 2022, due to a series of market crashes."
Sam Bankman-Fried, the disgraced founder of FTX, published a lengthy Substack article Thursday and claimed that his crypto exchange as well as trading firm Alameda Research were highly profitable enterprises in 2021 before the crypto winter began the following year.
"FTX International and Alameda were both legitimately and independently profitable businesses in 2021, each making billions," he wrote in the post titled "FTX Pre-Mortem Overview."
However, the broader crypto environment took a turn when Three Arrows Capital and other firms collapsed in the spring of 2022, he explained. That helped sink the asset values of nearly every major token, including bitcoin, ether, solana, and others.
Alameda lost "about 80 percent" of its assets' value last year, Bankman-Fried said, which subsequently dragged down FTX in the same way that Three Arrows' decline contaminated the likes of Voyager and others.
However, he cautioned that he is estimating some figures due to lack off access to some records.
"Many of my personal passwords are still being held by the Chapter 11 team–to say nothing about data," he wrote. "If the Chapter 11 team wants to add their data to the conversation, I would welcome that."
Bankman-Fried stepped down as the head of his crypto empire in November, and FTX filed for Chapter 11 bankruptcy, which he has since said was a regrettable decision.
New CEO John Ray III has accused Bankman-Fried and his deputies of incompetence, inexperience, and haphazard bookkeeping.
Still, in his Substack note, Bankman-Fried pointed out that there remains a potential for a very substantial recovery for customers, with FTX US still fully solvent.
Meanwhile, FTX International still has "billions of dollars of assets," he explained, and he's also dedicating nearly all of his own personal cash to customers.
In a bankruptcy hearing on Wednesday, FTX said it has located more than $5 billion in assets as part of its work toward repaying creditors.
The ex-FTX chief pleaded not guilty on January 3 in the Justice Department's criminal case. He is due to stand trial in October.
Phil Rosen
Thu, January 12, 2023 a
Sam Bankman-Fried, founder of FTX and Alameda ResearchFTX
Sam Bankman-Fried published an extensive Substack article Thursday titled, "FTX Pre-Mortem Overview."
He said both FTX and Alameda Research were netting billions in profits in 2021, before crypto token valuations crashed in 2022.
He noted that "Alameda lost about 80 percent of its assets' value over the course of 2022, due to a series of market crashes."
Sam Bankman-Fried, the disgraced founder of FTX, published a lengthy Substack article Thursday and claimed that his crypto exchange as well as trading firm Alameda Research were highly profitable enterprises in 2021 before the crypto winter began the following year.
"FTX International and Alameda were both legitimately and independently profitable businesses in 2021, each making billions," he wrote in the post titled "FTX Pre-Mortem Overview."
However, the broader crypto environment took a turn when Three Arrows Capital and other firms collapsed in the spring of 2022, he explained. That helped sink the asset values of nearly every major token, including bitcoin, ether, solana, and others.
Alameda lost "about 80 percent" of its assets' value last year, Bankman-Fried said, which subsequently dragged down FTX in the same way that Three Arrows' decline contaminated the likes of Voyager and others.
However, he cautioned that he is estimating some figures due to lack off access to some records.
"Many of my personal passwords are still being held by the Chapter 11 team–to say nothing about data," he wrote. "If the Chapter 11 team wants to add their data to the conversation, I would welcome that."
Bankman-Fried stepped down as the head of his crypto empire in November, and FTX filed for Chapter 11 bankruptcy, which he has since said was a regrettable decision.
New CEO John Ray III has accused Bankman-Fried and his deputies of incompetence, inexperience, and haphazard bookkeeping.
Still, in his Substack note, Bankman-Fried pointed out that there remains a potential for a very substantial recovery for customers, with FTX US still fully solvent.
Meanwhile, FTX International still has "billions of dollars of assets," he explained, and he's also dedicating nearly all of his own personal cash to customers.
In a bankruptcy hearing on Wednesday, FTX said it has located more than $5 billion in assets as part of its work toward repaying creditors.
The ex-FTX chief pleaded not guilty on January 3 in the Justice Department's criminal case. He is due to stand trial in October.
FTX Liquidators Lost $74K in Wrapped Bitcoin in 'Embarrassing On-Chain Faux Pas'
Stacy Elliott
Thu, January 12, 2023
The liquidators become the liquidated.
The restructuring team that is trying to locate and recover customer funds as part of the bankruptcy process for FTX and sister company Alameda Research is having a difficult time navigating the DeFi space.
The team recently attempted to move funds into an Alameda Research-owned multi-sig wallet but in the process lost 4 Aave Wrapped BTC (aWBTC), worth approximately $72,000, according to a report from blockchain intelligence firm Arkham Intelligence.
“The liquidators would benefit from having a DeFi expert to advise on the mechanics of closing Alameda DeFi positions and retrieving as much money as possible,” Zachary Lerangis, head of operations at Arkham, told Decrypt.
DeFi protocols, which enable users to trade, borrow, and loan crypto without intermediaries, require a certain level of sophistication to navigate. For instance, the way loans work on Aave, borrowers deposit collateral and borrow against it. Aave requires loans to be overcollateralized, meaning the ratio between collateral and borrowed funds has to stay above a certain threshold or risk being liquidated. Once a loan has been repaid, the borrower can unlock their collateral.
But it appears that the Alameda liquidators didn’t know that.
“Rather than paying back the debt to close out the position, the liquidators opted to remove all the extra collateral, putting the position in danger of liquidation,” the Arkham team wrote in the report. “This resulted in the liquidation of around 4 WBTC, $72K at current prices.”
FTX Restructuring Team Has Clawed Back $5B in Lost Assets
But that wasn't the only "embarrassing on-chain faux pas," said Arkham. Among the team’s other gaffes were nine failed attempts to move $1.75 million worth of Lido (LDO) tokens that were still vesting. At the time of writing, the wallet still has $3 million worth of LDO.
There’s another wallet that Arkham says belongs to Alameda that has sent $0.60 worth of DAI stablecoin and $0.02 COLLAR token to the multi-sig, but still has $1.5 million worth of funds in the wallet that have yet to be moved.
Arkham says the wallets it has identified have at least $25 million worth of Alameda’s funds deployed in DeFi protocols, like $6 million USDC, a stablecoin issued by Circle, being used to secure a $2 million NEAR loan on Bastion Protocol. There’s also funds stuck on other chains. For example, one Alameda wallet shows a $300 balance on Etherscan, but has $4.4 million worth of ETH still sitting on Aurora.
FTX, a once dominant exchange, collapsed in November following a bank run on the exchange that forced the company to admit it did not hold one-to-one reserves of customer assets, freeze withdrawals, and ultimately file for bankruptcy. Sam Bankman-Fried, founder of FTX and trading firm Alameda, has since been arrested and charged with eight financial crimes, including wire fraud and conspiracy to commit money laundering. Authorities allege that FTX customer funds were being funneled to Alameda for its own trading and investments, resulting in the loss of billions of dollars.
FTX restructuring team took a victory lap in court yesterday for having located $5 billion worth of assets. But at the start of the bankruptcy process, newly appointed FTX CEO John Ray III said that the liquidators didn’t know how much money the company had or how to access it.
There have also been suspicious transactions since FTX, including Alameda Research, entered Chapter 11 bankruptcy protection on November 11. At the end of December, blockchain sleuth ZachXBT spotted Alameda wallets swapping obscure tokens for Bitcoin and Ethereum by way of mixers, used to obscure transactions.
“Alameda ETH addresses are digging around in the sofa for spare change” one blockchain researcher wrote on Twitter.
Stacy Elliott
Thu, January 12, 2023
The liquidators become the liquidated.
The restructuring team that is trying to locate and recover customer funds as part of the bankruptcy process for FTX and sister company Alameda Research is having a difficult time navigating the DeFi space.
The team recently attempted to move funds into an Alameda Research-owned multi-sig wallet but in the process lost 4 Aave Wrapped BTC (aWBTC), worth approximately $72,000, according to a report from blockchain intelligence firm Arkham Intelligence.
“The liquidators would benefit from having a DeFi expert to advise on the mechanics of closing Alameda DeFi positions and retrieving as much money as possible,” Zachary Lerangis, head of operations at Arkham, told Decrypt.
DeFi protocols, which enable users to trade, borrow, and loan crypto without intermediaries, require a certain level of sophistication to navigate. For instance, the way loans work on Aave, borrowers deposit collateral and borrow against it. Aave requires loans to be overcollateralized, meaning the ratio between collateral and borrowed funds has to stay above a certain threshold or risk being liquidated. Once a loan has been repaid, the borrower can unlock their collateral.
But it appears that the Alameda liquidators didn’t know that.
“Rather than paying back the debt to close out the position, the liquidators opted to remove all the extra collateral, putting the position in danger of liquidation,” the Arkham team wrote in the report. “This resulted in the liquidation of around 4 WBTC, $72K at current prices.”
FTX Restructuring Team Has Clawed Back $5B in Lost Assets
But that wasn't the only "embarrassing on-chain faux pas," said Arkham. Among the team’s other gaffes were nine failed attempts to move $1.75 million worth of Lido (LDO) tokens that were still vesting. At the time of writing, the wallet still has $3 million worth of LDO.
There’s another wallet that Arkham says belongs to Alameda that has sent $0.60 worth of DAI stablecoin and $0.02 COLLAR token to the multi-sig, but still has $1.5 million worth of funds in the wallet that have yet to be moved.
Arkham says the wallets it has identified have at least $25 million worth of Alameda’s funds deployed in DeFi protocols, like $6 million USDC, a stablecoin issued by Circle, being used to secure a $2 million NEAR loan on Bastion Protocol. There’s also funds stuck on other chains. For example, one Alameda wallet shows a $300 balance on Etherscan, but has $4.4 million worth of ETH still sitting on Aurora.
FTX, a once dominant exchange, collapsed in November following a bank run on the exchange that forced the company to admit it did not hold one-to-one reserves of customer assets, freeze withdrawals, and ultimately file for bankruptcy. Sam Bankman-Fried, founder of FTX and trading firm Alameda, has since been arrested and charged with eight financial crimes, including wire fraud and conspiracy to commit money laundering. Authorities allege that FTX customer funds were being funneled to Alameda for its own trading and investments, resulting in the loss of billions of dollars.
FTX restructuring team took a victory lap in court yesterday for having located $5 billion worth of assets. But at the start of the bankruptcy process, newly appointed FTX CEO John Ray III said that the liquidators didn’t know how much money the company had or how to access it.
There have also been suspicious transactions since FTX, including Alameda Research, entered Chapter 11 bankruptcy protection on November 11. At the end of December, blockchain sleuth ZachXBT spotted Alameda wallets swapping obscure tokens for Bitcoin and Ethereum by way of mixers, used to obscure transactions.
“Alameda ETH addresses are digging around in the sofa for spare change” one blockchain researcher wrote on Twitter.
SBF's New Substack Blames CZ for 'Quick, Targeted Crash' That Brought Down FTX
Alys Key
Thu, January 12, 2023
With no job and under house arrest, Sam Bankman-Fried has taken the next logical step and launched a Substack newsletter.
In the first post of the aptly-called “SBF’s Substack,” the disgraced former FTX CEO blamed Binance CEO Changpeng ‘CZ’ Zhao for the demise of the crypto exchange’s sister firm Alameda Research.
“An extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,” SBF wrote, adding that contagion from Alameda spread to FTX “and other places.”
The two crypto bosses have exchanged words publicly about CZ’s role in the FTX crisis, which at one point included a rescue deal which was later called off.
On Substack, SBF said CZ had run an “extremely effective months-long PR campaign against FTX” leading up to the fateful few days in November which culminated in the exchange’s bankruptcy.
“I didn’t steal funds, and I certainly didn’t stash billions away,” SBF wrote.
The email newsletter is currently free to read, but Substack’s site allows keen readers to pledge ‘future’ subscriptions which they would pay if the writer chose to turn on paid-for subscription options.
Sam Bankman-Fried Released to Parents' Palo Alto Home on $250 Million Bond
SBF was arrested in December, but subsequently released from federal custody on a historic $250 million bond. He is now confined to his parents’ home in Palo Alto.
His bail conditions forbid the FTX founder from opening any new lines of credit, starting a business, or entering financial transactions larger than $1,000 without the approval of the government or the court. Making money from his Substack may therefore be out of the question for now.
“No funds were stolen”
The first piece of writing sent to his subscribers went over the familiar ground of FTX’s insolvency.
Comparing the liquidity crisis that took down FTX’s sister firm Alameda Research to other notable crypto collapses of last year, he said there had been no wrongdoing.
“[N]o funds were stolen,” the 30-year-old insisted. “Alameda lost money due to a market crash it was not adequately hedged for–as Three Arrows and others have this year. And FTX was impacted, as Voyager and others were earlier.”
While SBF said in the post that he had not been running Alameda for the past few years, he did not mention by name that firm’s former chief executive, Caroline Ellison. In December, along with FTX co-founder Gary Wang, Ellison pleaded guilty to fraud charges in an apparent deal to cooperate in authorities’ investigation into FTX—and SBF.
Caroline Ellison, Gary Wang Plead Guilty, Cooperating in FTX Investigation
It appears that SBF intends to continue blogging, despite the fraud charges he is contesting.
“I have a lot more to say–about why Alameda failed to hedge, what happened with FTX US, what led to the Chapter 11 process, S&C, and more,” he said. “But at least this is a start.”
Sam Bankman-Fried says tweets from Binance's CEO in November were a 'targeted attack' on Alameda's assets
Brian Evans
Thu, January 12, 2023
Changpeng Zhao and Sam Bankman-Fried.
Alys Key
Thu, January 12, 2023
With no job and under house arrest, Sam Bankman-Fried has taken the next logical step and launched a Substack newsletter.
In the first post of the aptly-called “SBF’s Substack,” the disgraced former FTX CEO blamed Binance CEO Changpeng ‘CZ’ Zhao for the demise of the crypto exchange’s sister firm Alameda Research.
“An extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,” SBF wrote, adding that contagion from Alameda spread to FTX “and other places.”
The two crypto bosses have exchanged words publicly about CZ’s role in the FTX crisis, which at one point included a rescue deal which was later called off.
On Substack, SBF said CZ had run an “extremely effective months-long PR campaign against FTX” leading up to the fateful few days in November which culminated in the exchange’s bankruptcy.
“I didn’t steal funds, and I certainly didn’t stash billions away,” SBF wrote.
The email newsletter is currently free to read, but Substack’s site allows keen readers to pledge ‘future’ subscriptions which they would pay if the writer chose to turn on paid-for subscription options.
Sam Bankman-Fried Released to Parents' Palo Alto Home on $250 Million Bond
SBF was arrested in December, but subsequently released from federal custody on a historic $250 million bond. He is now confined to his parents’ home in Palo Alto.
His bail conditions forbid the FTX founder from opening any new lines of credit, starting a business, or entering financial transactions larger than $1,000 without the approval of the government or the court. Making money from his Substack may therefore be out of the question for now.
“No funds were stolen”
The first piece of writing sent to his subscribers went over the familiar ground of FTX’s insolvency.
Comparing the liquidity crisis that took down FTX’s sister firm Alameda Research to other notable crypto collapses of last year, he said there had been no wrongdoing.
“[N]o funds were stolen,” the 30-year-old insisted. “Alameda lost money due to a market crash it was not adequately hedged for–as Three Arrows and others have this year. And FTX was impacted, as Voyager and others were earlier.”
While SBF said in the post that he had not been running Alameda for the past few years, he did not mention by name that firm’s former chief executive, Caroline Ellison. In December, along with FTX co-founder Gary Wang, Ellison pleaded guilty to fraud charges in an apparent deal to cooperate in authorities’ investigation into FTX—and SBF.
Caroline Ellison, Gary Wang Plead Guilty, Cooperating in FTX Investigation
It appears that SBF intends to continue blogging, despite the fraud charges he is contesting.
“I have a lot more to say–about why Alameda failed to hedge, what happened with FTX US, what led to the Chapter 11 process, S&C, and more,” he said. “But at least this is a start.”
Sam Bankman-Fried says tweets from Binance's CEO in November were a 'targeted attack' on Alameda's assets
Brian Evans
Thu, January 12, 2023
Changpeng Zhao and Sam Bankman-Fried.
Sam Bankman-Fried said Alameda's assets were the focus of a "targeted attack" by Binance CEO Changpeng Zhao.
"In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent," Bankman-Fried wrote.
Bankman-Fried previously had only hinted at Zhao's role but on Thursday took direct aim at his one-time rival.
Sam Bankman-Fried accused Binance CEO Changpeng Zhao of orchestrating the liquidity crisis that eventually caused the downfall of FTX.
In early November, Zhao tweeted that Binance would dump its holdings of FTX's native token, citing a report in CoinDesk that said FTT made up much of Alameda Research's assets. That sparked massive withdrawals from FTX, which filed for bankruptcy days later.
Since then, Bankman-Fried previously had only hinted at Zhao's role in the chain of events. But in a Substack post on Thursday, he took direct aim at his one-time rival.
"In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent," Bankman-Fried said.
He added that the contagion from Alameda spread to FTX and elsewhere, comparing it to how the collapse of Three Arrows in the spring of 2022 reached Voyager and other crypto platforms.
To be sure, Bankman-Fried also attributed the FTX crash to other factors, including Alameda's failure to sufficiently hedge its exposure. A series of crashes in the crypto market last year led to a roughly 80% decline in the value of Alameda's assets.
"But the November crash was a targeted attack on assets held by Alameda, not a broad market move," he added. "Over the few days in November, Alameda's assets fell roughly 50%."
For his part, Zhao has downplayed his role in FTX's collapse, saying "I think we were the last straw that broke the camel's back. It's not a straw that is really strong."
Binance agreed on November 8 to take over FTX and rescue Bankman-Fried, but pulled out a day later after noting concerns while performing due diligence.
FTX filed for bankruptcy protection on November 11 and is currently being led by new CEO John Ray III. Bankman-Fried was charge with fraud in December and has pleaded not guilty.
Elsewhere in his Substack post, Bankman-Fried also said FTX International had $8 billion in assets when Ray took over. He also expressed regret for FTX's bankruptcy filing and claimed customers can still recover a significant share of their assets.
No comments:
Post a Comment