SBF Denies Stealing Funds in “FTX Pre-Mortem Overview"

Former FTX CEO Sam Bankman Fried (SBF) has somehow found the time and energy to launch his own Substack newsletter today, despite him facing a slew of criminal charges from what seems like every US watchdog.

In an essay titled "FTX Pre-Mortem Overview," the 30-year-old largely repeated the information that he had been providing to media outlets prior to his arrest, including how Binance CEO Changpeng Zhao's (CZ) "fateful tweet" triggered a bank run on customer deposits.

However, SBF also denied that he stole users' funds, and even claimed that he was pressured to file for Chapter 11 bankruptcy for FTX, which according to him, interrupted efforts to make FTX users "substantially whole."

"I didn’t steal funds, and I certainly didn’t stash billions away. Nearly all of my assets were and still are utilizable to backstop FTX customers. I have, for instance, offered to contribute nearly all of my personal shares in Robinhood to customers — or 100%, if the Chapter 11 team would honor my D&O legal expense indemnification," SBF wrote.

"I still think that, if FTX International were to reboot today, there would be a real possibility of making customers substantially whole. And even without that, there are significant assets available for customers," he added.

Last week, SBF pleaded not guilty to all eight counts of US criminal charges including wire fraud, conspiracy to commit money laundering, and conspiracy to misuse customer funds. However, SBF's colleagues, Gary Wang and Caroline Ellison, have both pleaded guilty to fraud charges and are already cooperating with prosecutors, something which SBF left out of his article.

Yesterday, it was reported that FTX has recovered more than US$5 billion in cash and other liquid assets, and is hoping to monetise additional assets with a book value of more than US$4.6 billion.

It's still unclear just how much is owed to FTX's creditors, which is also why any attempt for SBF to explain himself is rather unnecessary at this point. Initial bankruptcy filings estimates that the amount is somewhere between US$1 billion and US$10 billion.

No front door or back door

On Tuesday, FTX bankruptcy lawyer Adam Landis said that SBF had instructed FTX and Alameda co founder Gary Wang to create a "back door" for the trading arm to borrow from FTX customers.

"We know what Alameda did with the money. It bought planes, houses, threw parties, made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula 1 team, the League of Legends, Coachella and many other businesses, events and personalities," Landis explained, adding that these expenditures led to a "shortfall in value" to repay the platform's creditors and customers.

In November, SBF denied claims that he created a “back door” to move US$10 billion in customer funds from FTX to Alameda.

“I certainly didn’t build the back door in there and I don’t know exactly what they’re referring to,” SBF told crypto whistleblower Tiffany Fong who conducted the interview, adding that he could not have built a backdoor because he “don’t even know how to code.”