Cryptocurrency

Sam Bankman-Fried Maintains FTX US is Solvent, Regardless of Debtors’ Claims

FTX’s former CEO, Sam Bankman-Fried, has reiterated claims that FTX US is solvent following FTX debtors’ newest statements on the contrary. 

In accordance with Bankman-Fried, the group did not account for patrons’ financial institution balances, which convey the US entity’s property nicely above its liabilities to prospects. 

Clearing the Air on FTX US

In a substack publish on Wednesday, Bankman-Fried mentioned that sure statements on Tuesday from Sullivan and Cromwell (S&C; one of many regulation corporations managing FTX’s chapter) have been “extraordinarily deceptive” as they pertain to FTX US’s solvency. 

On the time, the regulation agency said that the property it had managed to determine belonging to the alternate have been “considerably lower than the mixture third-party buyer balances urged by the digital ledger for FTX US.” In a separate presentation, the agency additionally claimed there have been important asset shortfalls at each FTX Worldwide and FTX US.

“These claims by S&C are incorrect, and contradicted by knowledge in a while in the identical doc,” mentioned Bankman-Fried. “FTX US was and is solvent, probably with lots of of hundreds of thousands of {dollars} in extra of buyer balances.”

Bankman-Fried instructed the similar story in regards to the US alternate each earlier than and after the FTX Group filed it for chapter in November, as each exchanges’ property have been separated. Equally, John J. Ray III – FTX’s new boss overseeing the chapter – instructed Congress final month that FTX US property have been separate from Alameda Analysis’s, with which FTX Worldwide had comingled its funds. 

The truth is, Bankman-Fried asserted that FTX US has a constructive stability sheet throughout the realm of $400 million in extra money. He arrives at this determine by together with the $428 million inside FTX US’s financial institution accounts as an asset – which he mentioned Cromwell has did not do. 

The Numbers

Particularly, the regulation agency introduced buyer balances as value $497 million, exceeding the $181 million in digital property FTX US had recognized related to the alternate. Thus, Cromwell concluded that FTX had a serious asset shortfall. When together with the alternate’s checking account stability, nonetheless, this shortfall turns into a surplus. 

Moreover, Bankman-Fried contested that the $497 million buyer stability determine was outdated, taken earlier than FTX US had skilled huge withdrawals. In actuality, he believed the determine to be about $199 million. 

Evaluating $609 million in whole money and digital property to a $199 million buyer stability determine, Bankman-Fried concluded that FTX US had “at the least $111m, and certain round $400m” in extra money earlier than chapter. 

“FTX US is solvent,” he mentioned. “Prospects ought to be given entry to their funds.”

Of the $181 million in digital property recognized as being related to FTX US, $90 million has gone lacking, in accordance with the alternate’s debtors on Tuesday.

Bankman-Fried has pleaded not responsible to fees of wire fraud, cash laundering conspiracy, and different accusations suggesting he had cheated traders. In contrast, Alameda Analysis’s former CEO Caroline Ellison, in addition to Bankman-Fried former proper hand Gary Wang, have pleaded responsible to comparable fees.  

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