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'I didn't steal funds,' Sam Bankman-Fried says in unusual post-arrest blog post

'I didn't steal funds,' Sam Bankman-Fried says in unusual post-arrest blog post

FTX Trading founder Samuel Bankman-Fried leaves Manhattan federal court in New York on Jan 3, 2023. (File photo: AP/Seth Wenig)

NEW YORK: Sam Bankman-Fried said he did not steal money and blamed the collapse of his now-bankrupt FTX exchange on a broad crash in cryptocurrency markets, in a highly unusual blog post on Thursday (Jan 12), a month after his arrest on United States fraud charges.

Federal prosecutors in Manhattan last month said Bankman-Fried stole billions of dollars from FTX customers to pay debts for his crypto-focused hedge fund, Alameda Research, purchase lavish real estate, and donate to US political campaigns.

He has pleaded not guilty.

"I didn't steal funds, and I certainly didn't stash billions away," Bankman-Fried wrote in the blog published on Substack, in a rare public statement by a US criminal defendant.

Defence lawyers typically advise clients to stay silent before trial because prosecutors may use their comments against them in court. His trial is scheduled to start on Oct 2, 2023.

A spokesman for Bankman-Fried declined to comment.

In the post, Bankman-Fried did not directly address many of the other charges brought against him by federal prosecutors in Manhattan last month, namely that he misled investors and lenders about the financial conditions of FTX and Alameda.

He wrote that Alameda failed to hedge against an "extreme" crash in the crypto markets, which ultimately came to pass last year.

"As Alameda became illiquid, FTX International did as well, because Alameda had a margin position open on FTX," Bankman-Fried wrote.

The 30-year-old onetime billionaire also said FTX's US wing is "fully solvent" and that its international unit has many billions of dollars in assets.

"If it were to reboot I believe there is a real chance that customers could be made substantially whole," he wrote.

Last month, two of his closest associates pleaded guilty to defrauding the trading platform's customers and agreed to cooperate with prosecutors' investigation.

Caroline Ellison, Alameda's former chief executive, said in her plea hearing that Bankman-Fried and other FTX executives received billions of dollars in secret loans from Alameda.

Bankman-Fried was released on a US$250 million bond in December and put under house arrest at his parents' Palo Alto, California home, which was pledged as collateral for his return to court. 

Source: Reuters/rc

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