SBF asserts that by asserting insolvency, Sullivan & Cromwell contradicted themselves
In a blog post dated January 17 that was shared on Twitter, former CEO Sam Bankman-Fried (also known as “SBF”) stated that the legal firm Sullivan & Cromwell have contradicted themselves when they claim that the defunct cryptocurrency exchange FTX.US is insolvent. This information was provided by Bankman-Fried.
The FTX Group has retained the legal services of the law firm to manage the bankruptcy procedures of several of its businesses, including FTX International, Alameda Research, and FTX.US, among others. On the other hand, Sam Bankman-Fried has mentioned on many occasions that he thinks FTX.US is financially stable and that the company should not have filed for bankruptcy.
Sullivan and Cromwell reiterated its claim that FTX.US is not solvent in a statement that was submitted to the United States Bankruptcy Court for the District of Delaware on January 17. The statement read: “The assets identified as of the Petition Date are substantially less than the aggregate third-party customer balances suggested by the electronic ledger for FTX US.”
SBF refuted the assertion in his article and noted that the legal company has contradicted itself by doing the following:
“Later in the same report, S&C reveals that FTX US has an additional $428 million USD in bank accounts, on top of the $181 million of tokens—for roughly $609 million of total assets[…] therefore FTX US had at least $111 million, and likely around $400 million, of excess cash on top of what was required to match customer balances.”
The previous CEO drew the conclusion from this information that “FTX US is solvent. Customers’ monies should be made available to them at all times.
On November 11, 2022, SBF resigned from his position as CEO of the cryptocurrency exchange FTX, and the following day, John J. Ray III was chosen to take over in that role. In relation to FTX’s filing for bankruptcy on December 13, the United States Securities and Exchange Commission (SEC) accused SBF of engaging in fraudulent activity. The Securities and Exchange Commission (SEC) made the allegations that he “orchestrated a years-long scheme to conceal from FTX’s investors[…]the concealed diversion of FTX customers’ monies to Alameda Research LLC, his privately-held crypto hedge fund.” He has entered a plea of not guilty, and the trial is now ongoing.
SBF started producing blog articles on substack on January 12 after being freed on bail; nevertheless, many members of the cryptocurrency community have been unsatisfied with his writings.
