Sam Bankman-Fried, the disgraced former chief of FTX, denied stashing away billions of dollars and gave his take on what happened to his bankrupt crypto exchange in a lengthy new post on Substack published Thursday.
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He denied stealing funds and claimed FTX and sister company Alameda Research collapsed because of the crypto market meltdown and inadequate hedging on Alameda’s part.
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“I didn’t steal funds, and I certainly didn’t stash billions away,” Bankman-Fried wrote. Later in the post he concluded that “Alameda lost money due to a market crash it was not adequately hedged for.”
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While alleging the trading firm “failed to sufficiently hedge its market exposure,” he also said he “hasn’t run Alameda for the last few years.”
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Bankman-Fried faces numerous federal charges including conspiracy to commit fraud, and is now free on bail at his parents’ home in California. He has pleaded not guilty to the charges, but his lieutenant and Alameda chief Caroline Ellison pleaded guilty to fraud charges and is now cooperating with an investigation with the U.S. Attorney for the Southern District of New York.
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While casting the blame of FTX’s downfall on Alameda’s poor hedging, Bankman-Fried notably didn’t address the $65 billion line of credit he opened from the exchange to the trading arm, as revealed in a court hearing on Wednesday. At the hearing, a lawyer representing FTX in its Chapter 11 bankruptcy proceedings said the credit line has led to a “shortfall in value” in repaying customers and creditors.
