Sam Bankman-Fried launched a Substack newsletter to defend himself

Suspension

The fallen founder of cryptocurrency On Thursday, Sam Bankman-Fried launched a newsletter on a popular platform offering a detailed defense of his actions.

Bankman-Fried said of the way he ran FTX, his now bankrupt cryptocurrency firm, which has been accused of misusing funds. Millions of customers.

It was his largest public defense since the Department of Justice Presented Eight counts of fraud, money laundering, and other charges were brought against Bankman-Fried last month, and the Securities and Exchange Commission and the CFTC have filed related civil complaints. Collectively, they portrayed the CEO as using client money at FTX to fund his own risky investments, personal purchases, and campaign donations.

Bankman-Fried pleaded not guilty to charges brought by the US Attorney for the Southern District of New York. He is currently under house arrest at his parents’ home in Palo Alto, California, and is set to go to trial on those charges later this year.

Bankman Fried did not respond to a message seeking comment, nor did his attorney, Mark Cohen. A spokesman for the Southern District of New York declined to comment.

Bankman Fried’s comments came Thursday via a post on New account on SubstackThe newsletter platform he created. The letter provided more details to support sentiments made by the 30-year-old former CEO in a series of media interviews before in Decemberappearances in which he also knowingly denied doing anything immoral or illegal.

Bankman-Fried wrote Thursday that FTX’s post-bankruptcy financial picture was less bleak than many legal and government critics of the company had claimed.

For example, he wrote of the company’s American division, “FTX US is fully solvent and always has been,” saying that it It was “ridiculous that US FTX users haven’t fully converted and got their money back yet.”

But while lawyers for the restructured FTX He said In bankruptcy court on Wednesday, they said they have recovered about $5 billion to help pay creditors, and they say the process is not simple.

said John J. Ray, a veteran bankruptcy executive who was brought in to try to clean up FTX, said tracking down a handful of accounts and subsidiaries amid a raft of incomplete bookkeeping would take months. And up to $8 billion can’t be counted, according to the investigators.

Bankman-Fried says he was careless at FTX. Prosecutors say it’s a scam

While dozens of customers waited for their money, which they had no access to, Bankman-Fried portrayed the losses as simply a matter of market fluctuations rather than any crime.

“No money was stolen. Alameda lost money due to the market crash and was not adequately hedged,” he wrote, detailing that company’s investment strategy and path to bankruptcy.

Even though Alameda was a company he helped found and was run by people with whom they remained close, Bankman-Fried sought to portray FTX as a separate victim of Alameda’s problems, similar to the way a group of independent crypto companies were affected by the broader market contagion.

FTX affected [by the Alameda challenges] As Voyager and others were earlier,” referring to the crypto asset manager went under Last summer due to falling values ​​at another crypto company, Terraform Labs.

But the SEC is in its complaint named Bankman-Fried is the “ultimate decision maker” at Alameda. It also alleged that he made “undeclared investments, luxury real estate purchases, and large political donations” with customer deposits to sister company FTX, painting a picture of a company that was far from a helpless bystander in Alameda’s troubles.

To help their case, prosecutors enlisted the help of former Bankman-Fried co-parents Caroline Ellison and Gary Wang, both of whom have pleaded guilty and are Cooperation with the government.

Bankman-Fried gave a series of interviews after the bankruptcy, including A.J extended session With ABC’s George Stephanopoulos. He also has Keep tweeting Since being charged a month ago by SDNY prosecutors.

The narrative has been consistent throughout: he says he He has little knowledge, let alone control of Alameda’s money. He will try to help people get their money back.

Thursday’s message continued this theme. “I dedicate almost all of my personal assets to clients,” he wrote, without explaining how that would work or what it would mean.

But he also provided more financial details than in previous statements. Bankman-Fried focused on how Alameda went bankrupt and essentially chose to ignore the thrust of the allegations against him — that he illegally used FTX clients’ money to prop up the hedge fund.

Bankman-Fried wrote in the Substack post that he was seeking to set things right with his testimony on bidding House Financial Services Committee on Dec. 13, writing of his arrest in the Bahamas, where he was living at the time: “Unfortunately, the Department of Justice moved to arrest me the night before, preempting my testimony with a completely different news cycle” and where FTX was based .

While Bankman-Fried on Thursday tried to portray himself as a helpful figure, Ray said the mess was the CEO’s making.

“Never in my professional life have I witnessed such a complete failure of corporate controls and such a complete absence of trustworthy financial information,” He said last month On how FTX and Alameda are managed under Bankman-Fried.

Legal experts have repeatedly said that the cryptocurrency executive’s press releases are a bad idea, providing fodder for prosecutors to recreate timelines and use comments against him.

It wasn’t clear if Substack launched as an ongoing newsletter or a one-off update, but Bankman-Fried concluded his letter by noting that readers can expect More of his writing.

“I have a lot to say,” he wrote. “But at least this is a start.”

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