SBF Writes First Substack Post

By Anthony • January 13, 2023 2:52 pm • Comments

Disgraced founder of FTX Sam Bankman-Fried is now out on bond which means instead of being inside of a cell in Rikers Island, SBF is actually sitting comfortably in his home writing on Substack.

In his first post on Substack, SBF claims that FTX US is still solvent and should be able to return customers‘ funds.

He also wrote he will be dedicating nearly all of his personal assets to customers.

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However, in his fairly lengthy Substack post,  he failed to mention his co–founder and former Alameda Research CEO pleading guilty to fraud charges.

The most bizarre thing about his new post is the fact he’s facing 120 years in Federal prison and he finds it’s okay to start a Substack!

Here’s a summary of the article:

In mid-November, FTX International became effectively insolvent. The FTX saga, at the end of the day, is somewhere between that of Voyager and Celsius.

Three things combined together to cause the implosion:

a) Over the course of 2021, Alameda’s balance sheet grew to roughly $100b of Net Asset Value, $8b of net borrowing (leverage), and $7b of liquidity on hand.

b) Alameda failed to sufficiently hedge its market exposure. Over the course of 2022, a series of large broad market crashes came–in stocks and in crypto–leading to a ~80% decrease in the market value of its assets.

c) In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent.

And then Alameda’s contagion spread to FTX and other places, similarly to how Three Arrows etc. ultimately impacted Voyager, Genesis, Celsius, BlockFi, Gemini, and others.

Despite this, very substantial recovery remains potentially available. FTX US remains fully solvent and should be able to return all customers’ funds. FTX International has many billions of dollars of assets, and I am dedicating nearly all of my personal assets to customers.

By now SBF’S lawyers probably want SBF to be quiet.

Engadget got the scoop too:

Sam Bankman-Fried is in a world of trouble. He’s facing up to 115 years in prison if he’s convicted of federal fraud and conspiracy charges. And yet the embattled founder of collapsed crypto exchange FTX — who has pleaded not guilty and is out on a $250 million bond while awaiting trial — figured it’d be a great idea to write about his perspective on the saga in a Substack newsletter.

In his first post, which is ostensibly about the collapse of FTX International, Bankman-Fried (aka SBF) claims that “I didn’t steal funds, and I certainly didn’t stash billions away.” SBF notes that FTX US (which serves customers in America) “remains fully solvent and should be able to return all customers’ funds.” He added that FTX International still has billions of dollars in assets and that he is “dedicating nearly all of my personal assets to customers.” SBF, who once had a net worth of approximately $26.5 billion, said at the end of November that he had $100,000 in his bank account, though he pledged to give almost all of his personal shares in Robinhood to customers.

The post covers much of the same ground that SBF has gone over in the myriad interviews he gave between FTX’s collapse in November and his arrest last month. He discusses the multiple crypto market crashes in 2022 and a tweet from Binance CEO Changpeng Zhao that sparked a run on FTX’s FTT token and prompted the implosion of his exchange. SBF also writes about how he was pressured to file for Chapter 11 bankruptcy protection for FTX. Meanwhile, he notes that many of the numbers he cites in the post are approximations, since he has been locked out of FTX’s systems by those overseeing its bankruptcy proceedings.

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