Sam Bankman-Fried, ex-crypto star accused White collar criminalLast month he published a lengthy essay for the first time since his arrest Blog This appears to provide his defense against charges of fraud.
“I didn’t steal funds, and I certainly didn’t hoard billions,” he writes A newly launched substock.
Bankman-Fried has been placed under house arrest while awaiting trial at her parents’ home in Palo Alto, California. He has pleaded not guilty to several federal counts of fraud and conspiracy related to the collapse of his crypto empire.
In what he calls a “pre-mortem overview” of FTX’s collapse, Bankman-Fried reiterates claims he made in November after the crypto exchange filed for bankruptcy and before his arrest.
Key themes include:
- He places heavy blame on AlamedaA crypto hedge fund he founded in 2017. “Alameda failed to adequately hedge against the risk of a serious market downturn: only a few billion dollars in assets were hedged,” he says.
- He was not in charge at Alamelu. Bankman-Fried, who reiterates that she has not been in charge of Alameda for “the last few years,” appointed her onetime girlfriend, Carolyn Ellison, as sole CEO in 2022.
- Alameda and FTX’s problems are not unique, writes Bankman-Fried. He often contextualizes the companies’ collapse as part of an industry-wide collapse that engulfed several firms, including Three Arrows Capital, Voyager and Celsius — all of which went bankrupt in the so-called crypto winter. Digital assets like a bear market.
- Alameda’s infection then spread to FTX “Because Alameda had a margin position open in FTX; and a run on the bank turned that cash crunch into bankruptcy.
- He says FTX was pressured into filing for Chapter 11 by the law firm Sullivan & Cromwell. “Had FTX been given a few weeks to raise the required liquidity, I believe it would have been able to substantially complete the client,” he writes. “I did not then realize that Sullivan & Cromwell could thwart those efforts.” Representatives for Sullivan & Cromwell did not immediately respond to a request for comment.
Some of Bankman-Fried’s claims directly contradict U.S. Attorneys’ allegations that FTX customer funds were used to plug holes in Alameda in violation of FTX’s terms of service.
Key witnesses for the trial included Alameda’s former CEO and co-founder of FTX; They have confessed to the crime And the banker was caught on fire for misappropriating client funds.
Separately on Thursday, seven news organizations asked the judge in Bankman-Fried’s criminal case to release the names of two people who co-signed a $250 million bond.
“Public interest in this matter cannot be overstated,” lawyers representing the news organizations wrote in a letter to the court.
Four people, including Bankman-Fried’s parents, co-signed the bond, which does not require her to pay if she fails to appear in court or violates other terms set by a judge.
Bankman-Fried’s attorney sought to seal the identities of the two non-parents, arguing their safety could be at risk.
News outlets including the Wall Street Journal, Washington Post and Associated Press said the argument was “purely speculative”, and Bankman-Fried failed to provide any compelling reason for keeping the names anonymous.
“Public…Following this alleged massive fraud and political corruption Mr. It is interesting to know who provided the financial support to Bankman-Fried, especially the financial leaders, investors, prominent Mr. Silicon Valley billionaires and elected representatives,” the letter said.
On Wednesday, the New York Times filed its own letter asking the judge to redact the names from the documents. Inner City Press filed a separate letter.
The judge has given Bankman Fried until January 19 to respond to the petitions.
— CNN Cara Scannell contributed reporting.