New prison report flouts claim FTX could have repaid customers from $25B in assets
Sam Bankman-Fried claims FTX was never insolvent, possessing $25B in assets to repay customers, but critics argue this ignores the November 2022 liquidity crisis.Summary
Sam Bankman-Fried, writing from prison, issued a report asserting that FTX was never insolvent but suffered a liquidity crisis, claiming the exchange held $25 billion in assets against $13 billion in liabilities, enough to repay all customers.
Bankman-Fried argues that outside counsel and new CEO John J. Ray III prematurely forced the company into Chapter 11, preventing rescue financing. He bases his solvency claim on repricing FTX's frozen portfolio, including Solana and FTT tokens, to projected 2025 values, suggesting the assets would be worth $136 billion. However, this reasoning is flawed because bankruptcy law freezes claims at the petition date, prohibiting speculation on future market recovery.
Former FTX general counsel Ryne Miller countered that assets on hand in November 2022 were inadequate, and the founders were fabricating lists. Experts maintain that freezing operations was necessary to preserve remaining value amid a complete collapse of confidence, a reality Bankman-Fried's timeline ignores by assuming continued operation and investor trust.
(Source：CryptoSlate)