Sam Bankman Fried (SBF), the Acerated Founder of the Now-Defunct FTX Exchange, revealed that the Exchange was never bankrupt but suffered a liquidity crisis.
In an interview from Prison, SBF stated that the exchange had sufficient assets to repay all its customers. However, the repayment process was hindered by a Market Panic resulting from a liquidity Crisis, which made it impossible for them to quickly assess the funds needed to meet the surging withdrawal requests.
SBF clarified that FTX, as an exchange and a firm, was never insolvent and had sufficient assets to cover all clients’ holdings.
He blamed the liquidity crisis caused by Panic for the downfall of the FTX Project.
“We had enough assets to pay back all customer funds. The issue was that the market panic caused by the liquidity crisis made it impossible to quickly access the funds.” SBF stated.
SBF also criticized the Bankruptcy process, claiming that the Initial asset estimate of $1 billion was ballooned to $15 billion. The Ex-Crypto Billionaire discussed other issues in the interview, including his unchanged lifestyle and commitment to giving back to society.
Political Undertone
Among several revelations made by SBF, the FTX head Huncho revealed that his entire legal tussle had some political undertones.
He stated that his prosecutors Danielle Sassoon, and Judge Kaplan, were both appointed by President Trump.
He claimed that the political tensions between the Trump and Biden administrations had some impact on the outcome of his trial.
Sam Bankman-Fried was sentenced on March 28, 2024, to 25 years in federal prison for orchestrating multiple fraudulent schemes.
The charges leading to his conviction include:
- Wire fraud (2 counts): Deceiving FTX customers and investors to obtain funds illicitly.
- Conspiracy to commit wire fraud (2 counts): Collaborating with others to execute wire fraud.
- Conspiracy to commit securities fraud: Manipulating FTX’s financial statements to mislead investors.
- Conspiracy to commit commodities fraud: Engaging in deceptive practices affecting cryptocurrency markets.
- Conspiracy to commit money laundering: Concealing the origins of illegally obtained funds.
FTX’s Collapse in 2022 was a major setback for the crypto industry, leading to a serious dip in the markets.
The FTT token was a high-utility token in the crypto industry at the time of the collapse, contributing to a negative impact on the market.
