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Founder of Failed Crypto Exchange FTX Pledges His Innocence
Sam Bankman-Fried, founder of bankrupt crypto exchange FTX, exits federal court in Manhattan. photo
© Seth Little/AP/dpa
The FTX collapse has rocked the crypto world. Company founder Sam Bankman-Fried is on trial on fraud charges, but he continues his defensive offensive.
The founder of the bankrupt cryptocurrency exchange FTX, Sam Bankman-Fried, has again denied fraud allegations. “I haven’t stolen any funds and I certainly haven’t stolen billions,” the fallen US star entrepreneur explained in a blog post on Thursday. Bankman-Fried is charged with fraud, money laundering and other offenses. The US Attorney’s office accuses him of embezzling billions in investor and customer funds. The 30-year-old is under house arrest on bail until the trial begins in October.
Bankman-Fried was arrested on December 12 in the Bahamas at the behest of the US Department of Justice. FTX had its headquarters there. Before the collapse, FTX was one of the largest exchanges for cryptocurrencies like Bitcoin. Bankman-Fried had already pleaded not guilty in court in New York in early January. He has been speaking out since the sudden collapse of his corporate empire in October – although legal experts warn that his statements could be used against him in court.
$5 billion in cash seized
At least there was a glimmer of hope for customers and investors of FTX: According to its own statements, the bankrupt cryptocurrency exchange FTX has already seized more than $5 billion in cash and other liquid assets. This was announced by lawyers after consistent reports from several media on Wednesday (local time) before the responsible bankruptcy court in Wilmington (US state of Delaware). In addition to the cash, hundreds of additional holdings with a book value of more than $4.6 billion were identified.
Those assets were valued at the time of FTX’s bankruptcy filing in November and do not include the $425 million being held by Bahamian authorities, the company’s lawyers said. However, it remains unclear to what extent the assets found will be sufficient to be able to service the creditors’ claims. The amount of missing FTX customer funds is not yet clear, the lawyers said. FTX had around 9 million customer accounts before the bankruptcy.
collapse within days
The FTX Group collapsed within a few days in October 2022 due to enormous withdrawals of funds in the wake of liquidity concerns. Billions in customer funds could not be paid out. Bankman-Fried, just called SBF in the crypto industry, resigned on November 11 and filed for bankruptcy for the group in the US state of Delaware. Shortly before, authorities in the Bahamas had already frozen company funds.
There are also civil lawsuits and class action lawsuits against the FTX founder in the United States. It is a spectacular crash: Just a few months ago, the young entrepreneur graced the front pages of US business journals as a crypto prodigy. Before the FTX bankruptcy, Forbes and Bloomberg once put his fortune at more than $26 billion. Other former FTX top executives have already pleaded guilty. After his extradition to the United States, Bankman-Fried was released on $250 million bail. He stays with electronic ankle bracelets in the house of his parents, who are professors at Stanford University in California.