Founder Bankman-fried: “I didn’t steal funds”

Sam Bankman-fried, the disgraced cryptocurrency executive, on Thursday made his first detailed response to the criminal charges filed against him last month, arguing that the millions of customers of his collapsed exchange, FTX, could still get their money back.

In a statement published on Substack, Bankman-fried said that “very substantial recovery remains potentially available.”

“I didn’t steal funds, and I certainly didn’t stash billions away,” he wrote. “Nearly all of my assets were and still are utilizable to backstop FTX customers.”

His statement came a day after the lawyers overseeing FTX’S bankruptcy said in court that they had recovered at least $5 billion in funds. Bankman-fried cited that announcement to try to bolster his case that FTX customers still could be made “substantially whole.” It was not clear whether he had vetted his statement with his legal team before publishing it.

FTX filed for bankruptcy in November after a run on customer deposits exposed an $8 billion hole in its accounts. Bankman-fried, 30, was then arrested last month at his home in the Bahamas, where FTX was based, and swiftly extradited to the United States. Federal prosecutors in Manhattan have charged him with fraud, money laundering and campaign finance violations.

Authorities say BankmanFried siphoned billions of dollars in customer deposits from FTX and used the funds to purchase luxury real estate, invest in other companies, make political contributions and fund cryptocurrency trading at Alameda Research, the hedge fund he also owned.

The FTX founder was released last month on $250 million bail under strict conditions that require him to remain confined to his parents’ home in Palo Alto, Calif. In a brief court appearance in New York last week, he pleaded not guilty to the criminal charges.

Bankman-fried’s statement Thursday reiterates a narrative he has advanced before — and that U.S. prosecutors, regulators and industry experts have rejected roundly. The post laid out a detailed timeline of the financial situation at Alameda, which was closely tied to FTX, arguing that the firm lost money as a result of a market crash that it was unprepared for.

Bankman-fried’s statement also blamed FTX’S failure partly on an attack by its largest rival, Binance.

“No funds were stolen,” he wrote.

But even as he outlined Alameda’s finances, Bankman-fried also asserted that he hadn’t run the firm “for the past few years” and didn’t have access to all of its financial information. Regulators and prosecutors have argued that he was in fact intimately involved in Alameda’s management and orchestrated a system that allowed the company to borrow essentially an unlimited amount of money from FTX’S pool of customer deposits.

His statement did not address the guilty pleas from two of his former top executives, Caroline Ellison and Gary Wang, both of whom are cooperating with prosecutors. Ellison, who once dated Bankman-fried, was the head of Alameda when the firm collapsed, and Wang founded FTX with Bankman-fried.

On Wednesday, a bankruptcy lawyer for FTX told a federal judge that the exchange had recovered more than $5 billion of cash and crypto assets — considerably more than the company had previously said it had on hand.

The announcement raised hopes that FTX might be able to return some money to its millions of creditors and customers around the world.