The statement by John J. Ray III, a seasoned corporate restructuring specialist overseeing FTX’s monetary concern, straight rebutted Bankman-Fried’s assertion that the “hurt to customers, lenders, and investors is zero” and that money was as soon as “no longer lost” attributable to FTX entities were solvent when the firm collapsed in November.
“Mr. Bankman-Fried cites 14 traces of the transcript from the January 31, 2024 monetary concern court docket hearing and three news stories of the hearing, Ray wrote within the statement filed earlier than Bankman-Fried’s sentencing in federal court docket in New York on Friday. “However, Mr. Bankman-Fried ignores pages and pages of serious commentary, qualifications, and caveats from that hearing.”
“The hurt was as soon as wide. The remorse is nonexistent. Effective altruism, a minimal of as lived by Samuel Bankman-Fried, was as soon as a lie,” Ray wrote.
Bankman-Fried, who cultivated an image as a socially-conscious wunderkind as he turned FTX into a crypto behemoth, was as soon as convicted in November on fraud and conspiracy charges. Prosecutors allege he orchestrated a years-long diagram to faucet buyer funds to finance abominable bets, luxury exact estate purchases and political donations.
Ray acknowledged that while a “very wide crew of dedicated folk” has labored feverishly all the diagram in which via the last 16 months to enhance money and stabilize FTX’s operations, Bankman-Fried’s victims are no longer doubtless to be made entire, noting that “customers, non-governmental collectors, governmental collectors, and non-insider stockholders accept as true with suffered and continue to suffer.”
Bankman-Fried’s competitors that FTX was as soon as solvent was as soon as contradicted by “relieve door” borrowing by Alameda Be taught, a sister trading firm, which meant buyer legend statements showing cryptocurrency holdings were “mistaken,” Ray acknowledged. Handiest 105 bitcoins were left on the FTX change when Bankman-Fried was as soon as ousted, in opposition to person claims for just about 100,000 bitcoins.
“Why were the bitcoins missing? A jury has concluded previous an cheap doubt that Mr. Bankman-Fried stole them and converted them into varied issues,” Ray wrote. “For that reason, they’re no longer accessible to be returned in-kind to his victims.”
Anticipated recoveries are “in no formulation assured” and remain extremely relying on the “voluntary subordination” of over $9 billion in authorities fines, Ray acknowledged, besides consensual settlements with U.S. companies and victory in future appropriate battles.
FTX’s implosion final November sent shockwaves via the crypto industry, pushing Bitcoin below $16,000. No longer lower than $8 billion in buyer deposits went missing in what authorities accept as true with known as one among the ideal monetary frauds in U.S. historical previous.
As soon as a fixture on journal covers and convention levels, Bankman-Fried now faces as a lot as 50 years in prison when he’s sentenced by U.S. District Judge Lewis Kaplan on March 28. Attorneys for Bankman-Fried accept as true with argued he should peaceable receive a miles lighter punishment.
The sentencing comes upright over a yr after Ray, who beforehand oversaw the liquidation of Enron, took accept as true with watch over of FTX in a final-ditch expose to stabilize the firm. Ray acknowledged his crew’s first pass was as soon as invoking the monetary concern court docket’s automatic terminate to terminate a “disastrous collapse triggered by Mr. Bankman-Fried’s crimes” from engulfing the crypto ecosystem.
Ray described Bankman-Fried as continuing to reside a “lifetime of delusion,” citing non-public writings revealing the crypto founder weighed the usage of “radical honesty on Twitter” to smear restructuring mavens while claiming he had funding “prepared to originate customers entire.”
“FTX was as soon as bustle for its very immediate existence by Mr. Bankman-Fried with hubris, conceitedness, and an entire lack of appreciate for the classic norms of the law, which is your entire extra inexcusable given his privileged upbringing,” Ray wrote.
The lead licensed official for Bankman-Fried didn’t straight respond to a inquire for teach.
