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Sam Bankman-Fried launches a Substack newsletter to defend himself

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Fallen crypto founder Sam Bankman-Fried on Thursday launched a e-newsletter on a preferred platform providing an elaborate protection of his actions.

“I didn’t steal funds, and I actually didn’t stash billions away,” Bankman-Fried stated of how he ran FTX, his now-bankrupt cryptocurrency agency, which has been accused of misusing the cash of millions of customers.

It was his largest public protection for the reason that Division of Justice filed eight counts of fraud, cash laundering and different prices in opposition to Bankman-Fried final month, and the Securities and Trade Fee and Commodity Futures Buying and selling Fee filed associated civil complaints. Collectively, they portrayed the manager as lengthy utilizing buyer cash at FTX to fund his personal dangerous investments, private purchases and marketing campaign donations.

Bankman-Fried pleaded not responsible to the Justice Division’s prices, introduced by the U.S. Lawyer from the Southern District of New York. He’s presently beneath home arrest at his dad and mom’ residence in Palo Alto, Calif., and set to go on trial on these prices later this 12 months.

Bankman-Fried didn’t reply to a message searching for remark, nor did his lawyer, Mark Cohen. A spokesman for the Southern District of New York declined to remark.

Bankman-Fried’s feedback Thursday got here by way of a submit on a new account on Substack, the e-newsletter platform, that he created. The missive provided extra particulars to again up the emotions the 30-year-old former CEO made in a blitz of media interviews earlier than he was arrested in December, appearances wherein he additionally denied knowingly doing something unethical or unlawful.

Bankman-Fried wrote Thursday that FTX’s monetary image post-bankruptcy was much less bleak than the corporate’s many authorized and authorities critics have alleged.

For example, “FTX US is totally solvent and at all times has been,” he wrote of the corporate’s American division, saying that it was “ridiculous that FTX US customers haven’t been made complete and gotten their funds again but.”

However whereas attorneys for the restructured FTX said in chapter courtroom Wednesday that they’d recovered some $5 billion to assist repay collectors, they are saying the method isn’t easy.

John J. Ray, the veteran chapter govt introduced in to attempt to clear up FTX, has stated monitoring down the swarm of accounts and subsidiaries amid a number of incomplete bookkeeping will take months. And as a lot as $8 billion can’t be accounted for, according to investigators.

Bankman-Fried says he was careless at FTX. Prosecutors say it’s fraud

As scores of consumers await their cash, which they haven’t been capable of entry, Bankman-Fried portrayed the losses as merely a matter of the up-and-down of markets and never any criminality.

“No funds had been stolen. Alameda misplaced cash on account of a market crash it was not adequately hedged for,” he wrote, elaborating intimately on that firm’s funding technique and path to insolvency.

Although Alameda was a agency he helped discovered and was run by folks to whom he remained shut, Bankman-Fried sought to painting FTX as a discrete sufferer of Alameda’s troubles, much like how a number of unbiased crypto corporations have been affected by broader contagion available in the market.

“FTX was impacted [by the Alameda challenges] as Voyager and others had been earlier,” he wrote, referring to the crypto asset supervisor that went under final summer time due to plummeting values at one other crypto firm, Terraform Labs.

However the SEC in its criticism called Bankman-Fried “the final word decision-maker” at Alameda. It additionally alleged that he made “undisclosed enterprise investments, lavish actual property purchases, and huge political donations” with buyer deposits to the FTX sister agency, drawing an image of an organization that was removed from a helpless bystander in Alameda’s troubles.

To help their case, prosecutors have the assistance of former Bankman-Fried associates Caroline Ellison and Gary Wang, each of whom have entered responsible pleas and are cooperating with the government.

Bankman-Fried gave a string of interviews after the chapter, together with a lengthy session with ABC’s George Stephanopoulos. He has additionally continued to tweet since being charged a month in the past by prosecutors on the SDNY.

The narrative has been constant all through: He says he has little data of, not to mention management over, Alameda’s funds. And he would attempt to assist folks get well their cash.

Thursday’s missive continued that theme. “I’m dedicating practically all of my private property to clients,” he wrote, with out explaining how that will work or what it will imply.

However he additionally provided extra monetary element than he had in earlier statements. Bankman-Fried targeted on how Alameda turned bancrupt and selected primarily to disregard the thrust of the allegations in opposition to him — that he illegally used FTX clients’ cash to prop up the hedge fund.

Bankman-Fried wrote within the Substack submit that he was searching for to set the document straight with testimony he was set to give the Home Monetary Companies Committee on Dec. 13. “Sadly, the DOJ moved to arrest me the evening earlier than, preempting my testimony with a completely totally different information cycle,” he wrote of his arrest within the Bahamas, the place he was dwelling on the time and the place FTX was primarily based.

Whereas Bankman-Fried tried Thursday to painting himself as a useful determine, Ray has stated that the mess is of the manager’s personal doing.

“By no means in my profession have I seen such an entire failure of company controls and such an entire absence of reliable monetary data,” he said last month of how FTX and Alameda had been run beneath Bankman-Fried.

Authorized specialists have repeatedly stated the crypto govt’s press statements are a nasty concept, offering fodder for prosecutors to re-create timelines and use feedback in opposition to him.

It was unclear if the Substack has been launched as an ongoing e-newsletter or a one-time replace, however Bankman-Fried concluded his submit by noting that readers might anticipate extra of his writings.

“I’ve much more to say,” he wrote. “However at the very least this can be a begin.”





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