SBF Insists Bankruptcy Team Is Mistaken About FTX US Insolvency

The bankruptcy restructuring team of FTX has repeatedly claimed that both the US and international exchanges of the company are missing customer funds worth millions.

However, Sam Bankman-Fried, the former CEO of the company, has stated that the team is wrong in its claim.

The presentation

John Ray is the new CEO of FTX, and he is the one who oversaw the bankruptcy of Enron. He recently put forward a presentation to the committee of unsecured creditors of FTX.

The new CEO said that the bankruptcy restructuring team had made a great deal of effort into the investigation and had only been able to locate FTX US funds of just $181 million.

The team stated that after FTX filed for bankruptcy back on November 11th, half of the digital assets had been drained from the exchange’s wallets in a number of ‘unauthorized’ transfers.

Bankman-Fried responded to the legal team of Sullivan & Cromwell that was behind the presentation and said that they were wrong about the claim and had contradicted it with data in the same document.

He asserted that the FTX US exchange was not insolvent and its customer balances were worth hundreds of millions of dollars.

The response

The ex-CEO of FTX is currently on house arrest, awaiting trial for eight financial crimes associated with the collapse of his empire.

He also has a legal team for representing his interest in the FTX bankruptcy case in Delaware. Nonetheless, he still continues to respond publicly to claims of the restructuring team.

He has denied the claims they have made and even posted screenshots of spreadsheets, which he claims are the true representation of his company when he stepped down from his position.

SBF said that in the same report, S&C had revealed later on that there was a sum of $428 million in FTX US’ bank accounts, along with the tokens worth $181 million.

This means that the total assets were valued at $609 million. He was referring to the $428 million attributed in the ‘Confirmed Cash’ table to West Realm Shires, the parent company of FTX US and Ledger X.

It is based in the US and was also the company that signed the bailout deal with BlockFi, the crypto lender before it also declared bankruptcy.

Other details

On November 17th, Ray shared an initial presentation in which he had said that FTX US, Embed Clearing, FTX US Markets and Ledger X (not a debtor in the bankruptcy) were part of the West Realm Shire silo.

There is a possibility that SBF may think that the silo represents funds of FTX US. The former CEO went on to explain how he had concluded that customer funds were not missing from FTX US.

However, it should be noted that the numbers he is using are those that existed when he had just stepped down from his position on November 11.

After that, Ray distanced the company from the founder and cut off his access.

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