ftx fallout

Sam Bankman-Fried Has a New Defense Strategy: Blogging

Photo: Gotham/GC Images

After the historic collapse of his crypto exchange, FTX, due to his alleged scheme to defraud investors, Sam Bankman-Fried couldn’t help but explain himself in a seemingly never-ending series of Twitter threads and high-profile interviews. But when he was charged with eight counts of fraud and conspiracy in December, he mostly let his lawyers do the talking — at least for a few weeks.

On Thursday morning, SBF posted a Substack called “FTX Pre-Mortem Overview” trying to explain where the company is at in its insolvency process. The day before, FTX’s new management told a Delaware bankruptcy court it had recovered over $5 billion in assets to pay back customers and creditors. But Bankman-Fried, ever-confident in his own abilities, thinks he could have done a better job at making everyone whole if FTX wasn’t forced to file for bankruptcy in November. “If FTX had been given a few weeks to raise the necessary liquidity, I believe it would have been able to make customers substantially whole,” he wrote.

Mostly though, the blog is an opportunity for the alleged fraudster to expand upon his not-guilty plea. “I didn’t steal funds, and I certainly didn’t stash billions away,” he wrote. Bankman-Fried also noted that the collapse of the investment firm he founded, Alameda Research, was related to the larger crypto trouble in 2022, not solely its own bad investments. But SBF doesn’t really address the reports that FTX stole customer funds to try and prop up Alameda. Nor does he discuss the guilty pleas of FTX co-founder Gary Wang and Alameda CEO Caroline Ellison, who copped to fraud charges and are now cooperating with federal prosecutors.

The unprompted Substack post suggests Bankman-Fried has a lot of time on his hands as he awaits his trial in October while under house arrest in his parents’ home in Palo Alto. That’s certainly the impression from a recent interview with Puck, in which SBF was hanging out with his family’s German shepherd and playing video games all day.

Sam Bankman-Fried Has a New Defense Strategy: Blogging