WORKING FROM HOME

Sam Bankman-Fried Launches Substack: ‘I Didn’t Steal Funds’

Under home detention, the FTX founder is still trying to convince the public of his innocence. The bigger challenge: a jury.

Joining the ranks of other influential outcasts, FTX founder Sam Bankman-Fried launched a Substack on Thursday, in which he again proclaimed his innocence.

“I didn’t steal funds, and I certainly didn’t stash billions away,” he wrote.

The 30-year-old, currently under home detention at his parents’ house near Stanford, is accused of perpetrating a massive fraud and using customer deposits at FTX—his crypto exchange—to bail out his cryptocurrency hedge fund, Alameda Research.

Bankman-Fried was indicted on eight counts in December, including wire fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering. Later that month he was released from jail on a $250 million bond. He subsequently pleaded not guilty to all charges; a trial is tentatively scheduled for October.

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In his inaugural Substack post, Bankman-Fried parroted many of the arguments he made in media appearances prior to his arrest. FTX’s collapse, he argued, was not the result of rampant fraud, but of failures by Alameda’s executives to “sufficiently hedge against the risk of an extreme market crash.” The breaking point came last fall, he claimed, when the CEO of rival firm Binance provoked “an extreme, quick, targeted crash” by encouraging a bank run on the business.

Bankman-Fried tweeted out a link to the Substack on Thursday morning, confirming its authenticity.

In the post, he also insisted that FTX’s U.S. business is still entirely solvent, and he called it “ridiculous” that American users have not yet been “made whole.”

As for FTX’s international operations, he lamented his decision-making at the company, but less about his risk-taking than his agreement to file for bankruptcy. The filing, he said, came after a pressure campaign from one of FTX’s legal advisors, Sullivan & Cromwell.

“I believe that, had FTX International been given a few weeks, it could likely have utilized its illiquid assets and equity to raise enough financing to make customers substantially whole,” Bankman-Fried wrote. “Since [Sullivan & Cromwell] pressured FTX into Chapter 11 filings, however, I worry that those pathways may have been abandoned. Even now, I believe that if FTX International were to reboot, there would be a real possibility of customers being made substantially whole.”

A spokesperson for Bankman-Fried declined to comment. Sullivan & Cromwell and attorneys for former Alameda Research CEO Caroline Ellison did not immediately reply to inquiries.

The fallen billionaire insisted that he is “dedicating nearly all of my personal assets to” helping customers who got burned. “I have, for instance, offered to contribute nearly all of my personal shares in Robinhood to customers–or 100%, if the Chapter 11 team would honor my [directors and officers] legal expense indemnification,” he wrote. (That stake appears to have been seized by authorities anyway.)

In his post, Bankman-Fried seemed to acknowledge that his reputation has imploded. “I’ve been, regrettably, slow to respond to public misperceptions and material misstatements,” he wrote. There is much more to say about his downfall, he continued, “But at least this is a start.”

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Noah KirschWealth and Power Reporter

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