Co-founder of FTX, Sam Bankman-Fried, has claimed that Binance CEO, Changpeng “CZ” Zhao had been working for months to bring down FTX, while he refuted allegations that he had stolen billions in user cash in a post on Substack on Thursday morning.
It is Bankman-first Fried’s substantive answer to FBI accusations that he oversaw a $8 billion fraud that decimated his $32 billion crypto business, CNBC reports.
Earlier this month, Bankman-Fried entered a not guilty plea to eight federal counts, which included fraud and money laundering. He was then freed on a $250 million recognizance bail.
Beginning in October, he will stand trial. Securities and Exchange Commission and Commodity Futures Trading Commission complaints have been filed regarding Bankman-Fried.
His post offers his viewpoint on the demise of FTX and his hedge fund Alameda Research, as well as supposed financial figures for FTX and Alameda, with the disclaimer that they are “JUST AN ESTIMATE.”
For instance, Bankman-Fried claims to have put the value of Alameda’s entire net assets at $99 billion in the start of 2022. He estimated that his hedge fund’s net assets had decreased to $10 billion by October.
He blamed the crash on a general market decline, even contrasting the performance of his FTT token with that of Tesla, bitcoin, and the Invesco QQQ, an ETF that tracks the Nasdaq 100.
Many of the assertions stated by Bankman-Fried in his piece have been refuted by bankruptcy attorneys, federal prosecutors, and regulators.
Authorities and attorneys claim that neither FTX nor Alameda were fully genuine companies, but rather were used as tools in Bankman-Fried’s fraud.
After FTX filed for bankruptcy in November, the businesses experienced large and puzzling financial shortages, according to FTX’s restructuring officers.
His longstanding executives, Caroline Ellison and Zixiao “Gary” Wang, both of whom pled guilty to counts of fraud, helped build the case against Bankman-Fried. Their assistance with federal investigations was not acknowledged in Bankman-post. Fried’s
Bankman-Fried also mentioned in his post that other cryptocurrency companies have been “blown out.”
He made no mention of the purported harm that the failure of FTX is said to have caused to three of those companies: BlockFi, Genesis, and Gemini.
Many of his claims were ones he had already stated, such as that FTX US was still solvent, that Alameda’s liquidity crisis was not the result of dishonesty but rather of larger market instability, and that FTX International and Alameda were both 100 percent honest and successful companies.
As the end of an “extremely effective months-long PR campaign against FTX,” the former CEO of FTX also cited a tweet from Zhao of Binance from November 6.
Zhao, however, refuted these allegations. According to a tweet from the CEO of Binance in December, “FTX destroyed themselves […] because they stole billions of dollars.”
Bankman-Fried expanded at the conclusion of the piece, ” All of which is to say: No funds were stolen,” the 30-year-old wrote.
