Bankman-Fried Refutes Accusations of Stolen Funds

Law

In a Thursday morning Substack post, FTX co-founder Sam Bankman-Fried adamantly denied accusations that he stole billions of users’ funds and insinuated that Binance CEO Changpeng “CZ” Zhao had orchestrated a long-term strategy to destabilize FTX.

This is Bankman-Fried’s first significant response to the federal authorities accusing him of leading an $8 billion fraud, which destroyed his cryptocurrency empire worth a massive $32 billion.

Earlier this month, Bankman-Fried entered a plea of not guilty to eight federal charges including fraud and money laundering. As part of his release terms, he was granted a $250 million recognizance bond.

Bankman-Fried, who has been the object of numerous complaints from both the US Securities and Exchange Commission and Commodity Futures Trading Commission, will go on trial come October.

Through his Substackpost, the FTX co-founder and former CEO offers insight into the downfall of FTX and his hedge fund Alameda Research, along with purported financial metrics for both entities — all referred to as “JUST AN ESTIMATE.” For example, Bankman-Fried, who in his post remarked that other crypto firms have also gone belly up, projected Alameda’s total net assets to be around $99 billion at the onset of 2022.

However, by October he said these assets had plummeted drastically to just 10 billion dollars. The former FTX CEO attributed the nosedive to a broader market correction, even comparing his FTT token’s performance to Tesla (NASDAQ:TSLA), Bitcoin (CRYPTO:BTC) and Invesco QQQ- which reflects Nasdaq 100 stocks.

Bankruptcy lawyers, federal prosecutors, and regulators have all countered these assertions made by Bankman-Fried in his post. In fact, authorities claim that both FTX and Alameda were fraudulent instruments being utilized by Bankman-Fried for personal gain.

After FTX filed for bankruptcy on November 11, its restructuring officers commented that the businesses experienced major and inexplicable cash shortages.

The former CEO of FTX, also noted in post that a tweet from Binance’s Changpeng Zhao on Nov. 6 was the result of an “extremely effective months-long PR campaign against FTX.”

Zhao directed attention to FTX through that tweet in which he said that he would liquidate tokens issued by Bankman-Fried’s exchange in the face of “recent revelations that have come to light.” These worries over the financial situation of FTX only magnified when Binance quickly withdrew its offer to bail out the company three days later.

Zhao, who has called Sam Bankman-Fried a “liar” for knowingly, according to him, misappropriating customers’ funds, has denied those claims.

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