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SBF reiterates Binance’s role in the collapse of FTX

Binance contributed to the collapse of FTX, and ‘I didn’t steal funds and I certainly didn’t stash billions away’, SBF said.



The former CEO of the troubled and bankrupt cryptocurrency exchange FTX has again attributed the failure of the exchange to the leading cryptocurrency exchange, Binance.

Sam Bankman-Fried also known as SBF in a newly published article titled “FTX Pre-Morterm Overview” on the 12th of January, 2023 wrote about the genesis of the events leading to the firm’s bankruptcy. The embattled CEO said, “in November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent”.

The former FTX CEO further accused Binance and it’s CEO, CZ for carrying out PR campaigns against it spanning several months before making the move by tweeting Binance will liquid for FTT tokens it held. SBF argued that, the intention to sell was not a broad market move, rather it was an attack targeted at assets of Alameda.

According to SBF, the Alameda contagion thus spread to FTX and other places (firms). In his opening statement, he claimed over the year 2021, the hedge fund, Alameda had about $100 billion of Net Asset Value in its balance sheet, $8 billion of net borrowing (leverage), and $7 billion of liquidity on hand. Alameda however failed to protect itself from the market and suffered leading to a fall in the value of its holdings by 80%.

FTX International could have made customers whole

The former CEO said that despite the insolvency, and despite the fact that FTX processed about $5 billion of withdrawals a few days before filing for bankruptcy, FTX International had about $8 billion of assets when the new CEO took over. He further said, he believed the company could have made all users substantially whole if given a few weeks by utilizing its illiquid assets and equity to raise enough financing. But since FTX was pressured into filing for Chapter 11 by the law firm S&C as he claimed, such moves may have been abandoned. 

Can FTX be rebooted?

I didn’t steal funds”, SBF said “and I certainly didn’t stash billions away”, he added. FTX International and Alameda were both legitimately and independently profitable businesses in 2021, each making billions, and then the hedge fund lost about 80% of its funds. He said SBF said he believes that if the exchange is rebooted, there will be a real possibility of users being made substantially whole. 

Read also; 

What has been happening on and to FTX since collapse

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