- Sam Bankman-Fried claims FTX never went bankrupt, but faced a liquidity crisis that was worsened by mismanagement and market panic.
- Bankman-Fried argues political factors influenced his trial, citing biased rulings and unequal sentencing as part of a larger political struggle.
Sam Bankman-Fried, the founder of FTX, has recently shared his position on the collapse of his cryptocurrency exchange, asserting that FTX was never bankrupt. According to Bankman-Fried, the real issue that led to the exchange’s downfall was a liquidity crisis, not an insolvency problem.
This statement comes amidst ongoing legal battles and widespread speculation about the reasons behind FTX’s sudden bankruptcy in late 2022.
SBF said in a recent interview that FTX has never gone bankrupt. This was a liquidity crisis, not an insolvency problem. They had enough assets to repay all customers at the time. The problem is that the liquidity crisis caused market panic and made it impossible to quickly cash…
— Wu Blockchain (@WuBlockchain) February 21, 2025
In a recent interview, Bankman-Fried clarified the factors that contributed to FTX’s collapse, arguing that the company had the assets necessary to repay its customers at the time.
However, he pointed out that a market panic, fueled by the liquidity crisis, made it impossible to liquidate assets quickly enough to avoid the collapse. He further dismissed the handling of the situation by law firms involved in the bankruptcy proceedings, claiming that the process was mismanaged and caused unnecessary delays in customers getting their funds back.
Bankman-Fried’s comments express his belief that the bankruptcy trustee’s actions worsened the situation. He claimed that initial reports of only $1 billion in assets were misleading. He argued that $15 billion in assets were available at the time, which was only admitted much later in the proceedings.
Political Influences on His Legal Case
As noted by ETHNews, the former FTX CEO also discussed the political context surrounding his trial. Bankman-Fried suggested that his case had become a political weapon in a struggle between the Department of Justice (DOJ) under Biden and the Trump administration. He referenced his prosecutor, Danielle Sassoon, and Judge Kaplan, appointed by President Trump, as key figures in this larger political narrative.
According to Bankman-Fried, these political dynamics had unfairly influenced his trial, leading to biased rulings and unequal sentencing for others involved in the case. He noted the disparity in sentencing among individuals who pleaded guilty in similar cases, citing the case of a Republican defendant who was sentenced to 7.5 years in prison, which was four times longer than the combined sentences of three other individuals.
Reflecting on FTX’s Operations and Use of Funds
Bankman-Fried also accused prosecutors of using threats to manipulate the testimony of those involved, including targeting the wife of one of the defendants, a Republican congressional candidate.
When asked about the operations of FTX and Alameda Research, Bankman-Fried defended the company’s business model. He explained that FTX was a financial trading platform where margin trading was a central aspect of its operations.
As FTX’s primary market maker, Alameda Research played a key role in maintaining liquidity. Despite the liquidity crisis, Bankman-Fried insisted that the company’s financial records showed that FTX’s assets always exceeded its liabilities.
Bankman-Fried continues to navigate the legal system, but as mentioned in our previous post, he remains cautiously optimistic about President Trump’s potential for a pardon. In the interview, he acknowledged the personal toll of his fall from being one of the wealthiest people in the world but maintained that his lifestyle remained unchanged.
The post FTX News: SBF Insists Exchange Wasn’t Insolvent, Just Hit by Market Panic appeared first on ETHNews.
