FTX CEO Slams SBF’s ‘Delusional’ Defense

FTX CEO Slams SBF’s ‘Delusional’ Defense

The chief executive of the FTX crypto exchange issued a very fiery victim impact statement in which he made several accusations against the disgraced founder of the company, Sam Bankman-Fried.

He accused SBF of making callous and false claims about customer losses and not expressing any remorse for the billions that were allegedly stolen in one of the biggest frauds in history.

The statement

A seasoned specialist in corporate restructuring, John J. Ray III is now overseeing the bankruptcy of the FTX empire.

In his statement, he directly rebutted the assertion of Bankman-Fried that there was zero harm to lenders, customers, and investors.

The disgraced crypto mogul had also claimed that money had not been lost because at the time of the company’s collapse in November, the FTX entities had been solvent.

The statement was penned down by Ray ahead of the sentencing of Bankman-Fried, which was scheduled to take place on Friday in federal court in New York.

Ray said that SBF had cited 14 lines of the transcript from the bankruptcy court hearing that took place on January 31st, 2024, and three news reports.

But, he said that he had ignored pages and pages of qualifications and important commentary from the same hearing.

Ray stated that the harm had been huge and there was no remorse. He asserted that the effective altruism that Bankman-Fried had lived by proved to be nothing more than a lie.

The disgraced founder

In November, the founder of FTX had been convicted on fraud and conspiracy charges and is now awaiting his sentence.

He had established the image of being a socially conscious wunderkind while working to establish his company as a crypto behemoth.

According to prosecutors, he had been running a scheme that involved using customer funds to make risky bets, political donations, and luxury real estate purchases.

The impact

Ray stated that in the last 16 months, a team of dedicated individuals had been feverishly working to recover money and stabilize the operations of the FTX crypto exchange.

However, he added that it was unlikely that the victims would be made whole and said that governmental and non-governmental creditors, customers, and non-stockholders were suffering.

Even though Bankman-Fried had claimed that FTX was solvent, Ray said that this was untrue because the customer account statements showing crypto holdings were ‘incorrect’.

This was due to the ‘back door’ borrowing of funds that was done by FTX’s sister trading company, Alameda Research.

When Bankman-Fried was ousted, the total number of BTC tokens held on FTX was about 105, while user claims were about 100,000 BTC.

Ray questioned why the Bitcoins were missing. He stated that a jury had concluded that they were stolen by Bankman-Fried and used for other things.

Therefore, they were no longer available and could not be returned to the victims. He also said that they could ensure anticipated recoveries.

This is due to the government fines that have to be paid, along with consensual settlements with agencies and victories in future legal battles.