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FTX founder Sam Bankman-Fried denies stealing funds from a failed cryptocurrency exchange

USA:  In a highly unusual blog post on Thursday, a month after his arrest on US fraud charges, Sam Bankman-Fried said he did not steal the money and blamed the collapse of his now-bankrupt FTX exchange on a wider crash in the cryptocurrency market. Held responsible.

In December, federal prosecutors in Manhattan charged Bankman-Fried with stealing billions of dollars from FTX customers to pay off loans for his crypto-focused hedge fund, Alameda Research, buy lavish real estate and donate to US political campaigns. 

He has pleaded not guilty. The Substack blog post, a rare public statement by a US criminal defendant, is a preview of the defense case when Bankman-Fried could begin its trial on October 2.

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Bankman-Fried wrote, “I didn’t steal money, and I certainly didn’t hide billions of dollars.” Clients are usually advised by defense attorneys to remain silent before trial because prosecutors can use their comments against them in court. Bankman-spokeswoman Fried declined to comment. The US Attorney’s Office in Manhattan did not respond to a request for comment.

Several other charges brought against Bankman-Fried by federal prosecutors in Manhattan last month, namely that she misled investors and lenders about the financial conditions of FTX and Alameda, were not directly addressed in the post. He added that he had “much more to say.”

The 30-year-old former billionaire wrote that Almeida failed to hedge against the “extreme” crash in the cryptocurrency markets, which occurred last year.

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“As Alameda became illiquid, so did FTX International, because Alameda had open margin positions on FTX,” Bankman-Fried wrote.

Two of his close associates pleaded guilty last month to defrauding customers of the trading platform and agreed to cooperate with prosecutors’ investigation.

Alameda’s former CEO Carolyn Ellison testified at her plea hearing that Bankman-Fried and other FTX executives received secret loans from Alameda totaling billions of dollars.

In December, Bankman-Fried was released on $250 million bond and placed under house arrest at her parents’ Palo Alto, California, home, which had been pledged as collateral for her return to court. .

Bankman-Fried also said in the post that FTX’s US division is “fully solvent” and that its international division has billions of dollars in assets.

“If this reboot happens, I believe there is a real possibility that customers will be made substantially whole,” he wrote. A lawyer for FTX told a federal bankruptcy court in Delaware on Wednesday that the exchange had discovered more than $5 billion in liquid assets and planned to sell non-strategic investments with a book value of $4.6 billion.

This does not include assets seized by the Bahamas Securities Commission, where FTX was based and where Bankman-Fried lived before being extradited to the US. Authorities in the Bahamas claim to have seized $3.5 billion, but FTX claims the funds are only worth $170 million.

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On Wednesday night, Bankman-Fried responded on Twitter to a user @wassielawyer who suggested selling the FTX exchange. “Yes, to my understanding this is and always has been the best recovery scenario for clients,” Bankman-Fried wrote. FTX declared bankruptcy on 11 November, the same day Bankman-Fried resigned as CEO.


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