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“Not everyone necessarily agrees with this,” Bankman-Fried added as a caveat, which may be the biggest understatement in the history of crypto. It also contradicts multiple reports from the Financial Times that said that FTX had less than $1 billion in liquid assets and $9 billion in liabilities by the end of its run, according to a balance sheet reportedly created by SBF Nov. 10. Most of its other remaining assets were illiquid, meaning they had very little value on the open market.
And just a reminder, On Nov. 7 SBF tweeted that “FTX is fine” and that the exchange had enough to cover all client holdings, adding that they “don’t invest client assets (even in treasuries).” Those tweets have since been deleted. Bankman-Fried has been desperately trying to save his image in interviews, but it seems neither authorities or those whose funds were stolen by his exchange seem ready to let him off the hook.
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Reports on FTX’s fallout noted that SBF tried to prop up his high-profile trading firm Alameda research with $10 billion in FTX customer funds. A new Wednesday report from Reuters based on company documents and interviews with current and former employees revealed that FTX was being used to benefit Alameda, despite both entities ostensibly being separate. Bankman-Fried had reportedly included the same assets on both FTX and Alameda’s balance sheets, and he was even brash enough to show that fact in presentations to investors. The report even notes that one of SBF’s aids “tweaked” accounting software that allowed him to hide the fact he was transferring customer funds between FTX and Alameda.
So he may want to make customers whole, but that may prove a hard bargain considering that court documents released this week show the number of creditors that FTX owes could be over 1 million.
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Update: 11/16/22 at 11:40 a.m. ET: This post was updated to include information of the House Committee on Financial Services requesting Bankman-Fried testify on the collapse of FTX.