In his latest attempt to defend his reputation to the outside world from behind bars, Sam Bankman-Fried (SBF), the former CEO of FTX Trading Ltd, came out today, February 20, to challenge the narratives that led to his conviction on seven counts of fraud and conspiracy.
The former FTX CEO, currently serving a 25-year sentence at Brooklyn’s Metropolitan Detention Center, posted a “10 Myths About Me & FTX” thread claiming FTX was never insolvent, customers are being “made whole” with above 100% repayments, and that his November 2023 trial was basically unfair.
He even spared time to address the rumors of a sexual nature leveled against him, which have drawn comparisons with the overt nature of the sexual experiences linked with the convicted fixer, Jeffrey Epstein.
The truth, according to Bankman-Fried, was: “There were no polycules or orgies.”
The 119% repayment claim is heavily disputed
The main statistic Sam Bankman-Fried (informally known as SBF) used to back his claims was that FTX customers are receiving between 119-143% of their original holdings.
However, skeptics have problems with that figure because it seems to be calculated from the day FTX filed for bankruptcy.
Using that valuation, a customer holding one Bitcoin on FTX would get around $17,000 in the bankruptcy distribution (119% of the November 2022 valuation).
On the other hand, if that person held the same Bitcoin on another exchange, that Bitcoin would now be worth $100,000, meaning a deficit of $80,000 or more.
Bankruptcy law requires November 2022 valuation date
Under US bankruptcy law, claims are to be valued as of the petition filing date. This means in FTX’s case, the date would remain November 11, 2022, when crypto prices had crashed due to the exchange’s collapse.
According to the testimony of John Ray III, the leader of FTX’s restructuring team (and previously oversaw Enron’s liquidation), FTX had recovered between $14.7 billion and $16.5 billion in assets. The recovery also includes a 13.56% equity stake in AI company Anthropic as well as the liquidation of real estate holdings.
From the approved repayment plan, 98% of customers (that is, those with claims under $50,000) would receive distributions within 60 days once the plan became effective in September 2025. As such, bigger creditors would receive their distributions at a different time.
Cooperating witnesses received reduced sentences after guilty pleas
Sam Bankman-Fried’s tweets also claimed Judge Lewis Kaplan gagged him, threw him in jail before trial, and banned evidence of solvency from the case.
According to court records, Bankman-Fried was convicted in November 2023 after a federal jury found him guilty on seven counts of fraud and conspiracy. He would later be sentenced to 25 years in prison in March 2024.
There were also rumors of polyamory and sex parties flying around at the time of the scandal. The allegations shared a similar style to those leveled against financial mogul Jeffrey Epstein, who, according to recent files released by the DOJ, helped to fund projects like Bitcoin, Coinbase, and Blockstream, going as far back as 2014.
However, Bankman-Fried’s X thread has effectively shut down those rumors of sexual impropriety.
Prosecutors brought up the testimony of his ex-girlfriend and former CEO of Alameda Research, Caroline Ellison, Gary Wang (co-founder of FTX), and Nishad Singh, the former FTX engineering director, during the trial.
The cooperating witnesses got reduced punishments, with Caroline getting a two-year sentence, Wang also sentenced to time served with supervised release, and Singh spending no time in prison.
Bankman-Fried also claimed that the court suppressed evidence of solvency and that lawyers “took over” the company to generate their fees. He also claimed that he had secured funding offers that would have covered the liquidity gap and allowed withdrawals to continue.
The court records, however, revealed that after John Ray III took over from Bankman-Fried as the CEO, his team discovered that FTX’s financial records were incomplete and inaccurate, alongside systemic failure of internal controls.
President Trump has ruled out the possibility of a presidential pardon for the convicted executive who was a known Democratic donor. The FTT token has also seen sharp spikes and falls since SBF’s almost daily streak of publicly steering the narrative around his trial and conviction.
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Source: https://www.cryptopolitan.com/sbf-myth-shuts-down-epstein-allegations/
