Law firm Sullivan & Cromwell contradicted itself when it claimed that closed-end crypto exchange FTX US is insolvent, former CEO Sam Bankman-Fried claimed in a Jan. 17 blog post shared on Twitter.
FTX US is solvent, as it always has been.https://t.co/XjcyYFsoU0 pic.twitter.com/kn9Wm9wxjl
—SBF (@SBF_FTX) January 18, 2023
The law firm was retained by the FTX Group to handle bankruptcy proceedings for several of its subsidiaries, including FTX International, Alameda Research, and FTX US. However, Bankman-Fried has stated on several occasions that he believes FTX US is solvent and should not have filed for bankruptcy.
In a statement filed with the United States Bankruptcy Court for the District of Delaware on January 17, Sullivan and Cromwell reiterated its assertion that FTX US is not solvent, stating: “The assets identified as of the date of the petition are substantially less than the total third-party customer balances suggested by the electronic ledger for FTX US.”
In its post, SBF denied this claim, stating that the law firm has contradicted itself:
“Later in the same report, S&C reveals that FTX US has an additional $428 million in bank accounts, on top of the $181 million of tokens, for approximately $609 million of total assets. […] therefore, FTX US had at least $111 million, and probably about $400 million, of excess cash on top of what was required to match customer balances.”
The former CEO concluded from this that “FTX US is solvent. Clients must have access to their funds.”
SBF stepped down as CEO of the exchange on Nov. 11, and John J. Ray III was appointed as the company’s replacement CEO. On December 13, the US Securities and Exchange Commission charged SBF with fraud in connection with the bankruptcy of FTX. The SEC alleged that it “orchestrated a years-long fraud to hide it from FTX investors.” […] the undisclosed diversion of FTX client funds to Alameda Research LLC, its private crypto hedge fund.” Bankman-Fried has pleaded not guilty and is awaiting trial.
After being released on bail, SBF began publishing blog posts on the substack starting January 12, but many in the crypto community have not been impressed with his writing.
This post SBF says Sullivan & Cromwell contradicted itself with insolvency claims
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