Sam Bankman Fried He once again challenges the basic narrative of his downfall: that FTX It was insolvent when it collapsed in November 2022.
In 15 pages a report Writing from prison on September 30, the disgraced founder claimed the exchange had “never been insolvent” but was trapped in a “liquidity crisis” after customers withdrew $5 billion in two days.
Together, FTX and its trading arm, Alameda Research, have $25 billion in assets and $16 billion in equity value against about $13 billion in liabilities, he said. According to him, his companies had enough to repay customers in full if the company was allowed to continue operating.
books:
“FTX has always had sufficient assets to repay all clients in kind, and provide significant value to shareholders as well. This is what would have happened if the lawyers had not acquired FTX.”
Instead, Bankman-Fried puts the blame on the outside consultant and the new CEO John J. Ray III for pushing FTX into Chapter 11 Before the rescue financing is completed.
His framing of the FTX issue as a liquidity issue, rather than insolvency, serves to mitigate allegations of fraud and redirections. Blame the legal team that froze operations.
If accepted, it would turn the implosion of one misused deposit into a fixable bank run, interrupted by overzealous lawyers.
Solve too late
In his report, Bankman-Fried treats the frozen FTX portfolio as if it survived intact through the entire 2023-2025 market recovery.
It reprices the bankrupt company’s holdings in Solana, RobinhoodSui, Anthropic and even the FTT token which is now worthless in current values, suggesting that by the end of this year, the basket will be worth around $136 billion. This would easily cover the $25 billion he cited in customer and creditor claims.
Hence, he insists, everyone would have been paid “in full, or in kind,” and equity investors would have walked away with billions.
However, this logic is flawed because it is “bull market solvency.”
Bankruptcy law does not allow a failing company to continue trading for years in the hope that rising prices will repair its balance sheet. Once Chapter 11 is filed, claims are frozen on the petition date, converted to dollars, and pursued through recovery, not speculation.
As FTX’s former General Counsel, Ren Miller He pointed out:
“In that week of November 2022, there were never enough assets available, and the founders were fabricating asset lists (and desperately chasing new investors). The coins were gone, guys. Your coins were gone. That’s why the bankruptcy happened.”
This means that much of the FTX portfolio is created with clients’ commingled funds. No court would allow those assets to remain at risk while management bet on a rebound.
Bankman Fried’s calculations will only work if regulators and creditors allow the exchange, under criminal pressure and liquidity pressures, to continue operating normally for another two years, a scenario that borders on fantasy.
FTX restart that never happened
The same optimism lies behind his claim that FTX “was shut down too early.”
Bankman-Fried insists that the exchange was still earning about $3 million a day and about $1 billion a year when Ray ceased operations. He also confirms that the administration has identified between $6 billion to $8 billion in emergency funding that could have filled the gap “by the end of November 2022.”
This line of argument assumes that FTX would have remained an ongoing concern, that trading would have continued, clients would have stayed, and the portfolio would have avoided short-selling discounts.
But by mid-November, the stock market faced a complete collapse in confidence. The opposing parties were fleeing, Licenses were suspended Law enforcement agencies were circling around. Under these circumstances, maintaining FTX would have risked greater losses and regulatory adverse reactions.
However, industry experts noted that the bankruptcy institution chose the safer route of freezing the accounts, preserving what remained, and pursuing orderly asset recovery under court supervision.
In fact, Miller noted that the bankruptcy filing helped save some value, rather than destroy it.
According to him, the disciplined management of FTX’s Solana and Anthropic Stakes properties, which both rose sharply in the recovery period, has become one of the main reasons why the creditors may now be left whole.
This means that Bankman-Fried’s picture of a profitable company wrongfully shut down by lawyers ignores these facts. Its assumptions about sustained revenues and investor confidence belong to a world that no longer exists once confidence evaporates.
Competing timetables, competing realities
At its core, the dispute is about the timeline that defines the company’s reality.
Bankman-Fried measures solvency by 2025 asset prices and businesses that never closed. The bankruptcy estate measures it by what remains in November 2022.
According to the ownership timeline, FTX faced an $8 billion hole, assets were illiquid or overvalued, and new financing efforts stalled. Freezing operations and converting claims into dollars was the only fair course.
According to Bankman Fried’s timeline, the intervention caused damage as the lawyers “took control” of the company, sold assets in a bull market, incurred nearly $1 billion in fees, and “destroyed” more than $120 billion in hypothetical upside.
This reversal turns the cleaning process into the culprit. It reframes the standard court-supervised liquidation process as a hostile takeover that allegedly evaporates future value.
However, the central fact remains unchanged: when customers demanded their money, FTX was unable to pay. Everything else is retrospective storytelling.
As a blockchain investigator ZachXBT Frames he – she:
“SBF is just trying to exploit the fact that all of FTX’s assets/investments went up from picobottom prices in November 2022 when they couldn’t actually pay users at the time of the bankruptcy, and instead point to the bankruptcy team as the real villain.”
