Bankman-Fried Continues to Blame Binance for the Collapse of His Crypto Empire

Former FTX CEO Sam Bankman-Fried has released an extensive Substack article talking about how his crypto empire collapsed, once again putting the blame on rival crypto exchange Binance. 

On Thursday, Bankman-Fried published a Substack article titled “FTX Pre-Mortem Overview,” where he extensively talked about his group of crypto-related companies and how they failed. Among other things, the disgraced crypto boss continued to argue that Binance had a big role in the collapse of his businesses. 

“In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,” SBF said, adding that the contagion from Alameda then spread to FTX and other companies.

SBF also claimed that Binance CEO Changpeng Zhao (CZ) had run an “extremely effective months-long PR campaign against FTX” leading up to the fateful few days in November which culminated in the exchange’s bankruptcy.

SBF’s claims come despite the fact that the new FTX management has accused him of mishandling customer funds. On Wednesday, FTX attorney Andrew G. Dietderich said in federal court in Wilmington, Delaware that Alameda spent a lot of money on hotels and parties. 

“It [Alameda] bought planes, houses, threw parties, made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula 1 team, the League of Legends, Coachella and many other businesses, events and personalities.”

John Ray III, the new CEO of FTX, has accused SBF and other FTX executives of incompetence, inexperience, and haphazard bookkeeping. He said in mid-December that FTX collapsed because of the “concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals”

SBF also claimed that his crypto exchange as well as trading firm Alameda Research were highly profitable back in 2021 but things started to go sour last year following a string of events that started with the collapse of Terra and 3AC and helped sink the asset values of nearly every major token.

“FTX International and Alameda were both legitimately and independently profitable businesses in 2021, each making billions,” he said, adding that then Alameda lost “about 80 percent” of its assets’ value in 2022. 

As reported, Bankman-Fried was arrested in The Bahamas in December last year after US prosecutors formally filed criminal charges against him. He was eventually extradited to the US where he was released from jail after posting a $250m bond in a New York court.

The new FTX management has recently disclosed that they have recovered over $5 billion in cash and liquid assets that may be used to repay creditors. Mentioning this, SBF said FTX International has “many billions of dollars of assets” while insisting that “FTX US is fully solvent and always has been.”

Notably, the post does not address criminal charges filed against SBF or the guilty pleas entered by former FTX and Alameda executives, particularly FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison.