Sam Bankman Fried, the convicted founder and former CEO of the FTX collapsed exchange, claims his innocence. He says that political bias influenced the prosecution.
He argued in an interview with The New York Sun that his case had been unfairly handled, and that his legal problems were due to his political shift.
The interview took place less than a couple of days after FTX had begun to reimburse customers impacted in November 2022 by its collapse.
FTX’s liquidity issues
Bankman-Fried maintains FTX has never been insolvent, despite receiving a 25-year sentence for orchestrating what is considered one of the largest frauds committed in US History. He said that the exchange was experiencing a liquidity crisis rather than collapse.
According to him
“I think the single biggest thing is that FTX was never insolvent. It was never bankrupt. Neither was Alameda. They always had enough to make good on all of their liabilities. What happened was a liquidity crisis, a run on the bank.”
Before the collapse of the exchange in November 2022 he stated, FTX was worth about $10 billion plus $20 billion more in equity.
Bankman-Fried also pointed out that Alameda Research had already begun liquidating assets to cover liabilities, but the panic-driven withdrawals outpaced the firm’s ability to generate cash quickly.
The convicted FTX founder also accused law firm Sullivan & Cromwell of mishandling the exchange’s restructuring. He claimed that instead of resolving this crisis, Sullivan & Cromwell stalled attempts to reimburse customers.
Bankman-Fried said:
“A law firm took over the company and, you know, spent the next two years sort of twiddling its thumbs and pretending there is no money left.”
Political Retaliation
Former billionaire thinks his legal problems are due to political motives. He argued FTX executives cooperating with authorities were given lighter sentences due to their ties to Democratic Party.
Before his downfall, Bankman-Fried was one of the largest donors to President Joe Biden’s campaign. However, he claims his political stance shifted due to the administration’s hostile regulatory approach to digital assets.
“He said”
“I became really frustrated and disappointed with what I saw of the Biden administration and the Democratic Party. Particularly on crypto policy, the Biden administration was just incredibly destructive and difficult to work with.”
However, he noted that the Republicans were more receptive and that he had secretly contributed to the party’s causes—a fact he believes may have influenced his prosecution.
Trump’s cozying up
Bankman-Fried further likened his prosecution to what President Donald Trump has faced, describing both cases as examples of the Department of Justice’s (DoJ) politicization.
The FTX founder pointed to US District Judge Lewis Kaplan as a common adversary in his and Trump’s cases. Kaplan presided over Bankman-Fried’s fraud trial and Trump’s sexual abuse and defamation cases involving writer E. Jean Carroll for which he was found liable.
“He said”
“I know President Trump had a lot of frustrations with Judge Kaplan. I certainly did as well.”
Trump had previously criticised Kaplan and called him biased. With Trump’s return to office, Bankman-Fried’s remarks appear to signal an attempt to align himself with the president, who can grant pardons.
Reports suggest that his parents have also been working hard to obtain a pardon. The speculation about his hopes of clemency in a Trump Administration is fueled by the claims he makes regarding injustices and political targets.
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