Sam Bankman-Fried’s Bombshell Claim: FTX Was ’Never Actually Insolvent’ — His Full Story Revealed
FTX founder breaks his silence with explosive insolvency denial.
The alternate reality according to SBF
Bankman-Fried paints a picture of temporary liquidity constraints rather than fundamental insolvency. He claims market panic triggered a bank run that could have been managed with proper financing.
The numbers game
According to his calculations, FTX's assets nearly matched liabilities before the collapse. The margin was razor-thin but technically solvent in his version of events.
Regulatory roulette
He argues regulators jumped the gun—another case of financial watchdogs showing up after the party's already over. Because nothing says 'effective oversight' like closing the barn door after the crypto has bolted.
The former crypto king insists this wasn't another Lehman moment—just a perfect storm of bad timing and worse PR.
SBF Portrays FTX Collapse As A Classic Bank Run Triggered By Panic Withdrawals
He frames the collapse as a classic run on the bank. Withdrawals spiked to billions in days, the paper says, while the company sought asset sales and financing and continued to generate trading fees. The authors claim deals were in motion to bridge the shortfall by late Nov. 2022 and that customer withdrawals were resuming.
[SBF says:]
This is where the money went. https://t.co/HVRwEw5Z1k https://t.co/5DrA13L5YE pic.twitter.com/O6q77DvmTn
The narrative disputes the bankruptcy team’s early statements about shortfalls. It argues FTX and Alameda assets exceeded liabilities in 2021 and through mid-2022, and that the estate’s own Jan. 2023 materials showed assets roughly equal to or above customer claims as of the filing date.
Further, SBF and his team blame subsequent decisions in bankruptcy for value erosion and the long delay in payouts.
Solana, Sui And Anthropic Cited As Assets That Soared After FTX Liquidations
Bankman-Fried’s camp points to asset sales they say were poorly timed. Stakes in tokens and private companies are listed with what the authors call materially higher estimated values today.
They cite Solana, Sui and Anthropic among positions that WOULD have been worth far more if held through the market rebound, while alleging insider-favored pricing and heavy professional fees drained the estate.
They also criticize dollarized payouts. Creditors are receiving the US dollar value of their crypto as of Nov. 11, 2022, not the coins themselves. The paper argues this approach denies customers the upside from the subsequent rally, and says the years long wait compounded the gap between petition date prices and current levels.
FTX Once Valued Above $30B Before Rapid Unraveling In 2022
Context matters. FTX was once valued above $30b with more than a million users.
Its fall followed revelations about intertwined risk between the exchange and Alameda, a rush of withdrawals and a failed rescue.
After a 2023 trial, Bankman-Fried was convicted on seven counts, and in March 2024 received a 25-year sentence with an $11b forfeiture, a judgment he is appealing.
The estate has said it maximized recoveries, pointing to asset monetization and litigation wins that funded rising payout projections. Creditors, especially smaller account holders, have focused on speed and certainty of cash, even if that meant giving up crypto upside.
Shareholders, by contrast, are recovering only a fraction of invested capital.
FTX Recovery Sets Rare Precedent For Crypto Bankruptcies Worldwide
For crypto markets, NEAR full recovery of customer funds based on petition-date values marks a rare outcome in a major exchange collapse. The debate over whether repayments should have been made in crypto instead of dollars, and whether the estate sold assets too early, will remain a case study in how to unwind a trading platform during a volatile bull cycle.
Bankman-Fried’s document seeks to recast that history. “The answer is they never left,” it says of customer funds, and it concludes that FTX could have paid everyone in 2022 if control had not shifted to external counsel and the court process.
The courts will decide if that claim holds up, yet the size of the recoveries has already shifted how insolvency is understood in crypto collapses.
