SBF Leaked Testimony – Who Is To Be Blamed?

Forbes was informed on Tuesday that Sam Bankman-Fried was scheduled to provide testimony to Congress, but he was detained in the Bahamas the night before.

Sam Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX, was supposed to appear before the U.S. House of Representatives Committee on Financial Services on Tuesday. 

However, at the request of American authorities, he was held in the Bahamas late on Monday.

Instead of admitting any wrongdoing on his part, SBF pointed the finger at the current CEO and his legal counsel.

The former CEO of FTX, also known as SBF, was detained on December 12, the day before his scheduled appearance before Congress via video conference.

What were his assertions?

According to Forbes, the disgraced CEO planned to pin the blame for the collapse of his $32 billion business on others.

In his testimony, SBF restated the same arguments concerning FTX.US, the international bitcoin exchange’s sibling firm. 

Despite being part of the Chapter 11 bankruptcy filing on November 11, he claimed that the company, headquartered in the United States, was still “completely solvent.”

He expressed regret about entrusting some of FTX to what he referred to as “toxic leadership” by giving them authority with a click of a button on Docusign at 4:30 in the morning.

He went on to blame John J. Ray III, a restructuring attorney who became FTX CEO after the bankruptcy filing, for including FTX.US in the Chapter 11 bankruptcy. According to SBF, “American clients were safe, at least until Mr. Ray’s team took over.”

In contrast, Ray harshly criticized the former CEO of FTX and his management abilities. Ray mentioned in his testimony for the FTX investigation hearing that he had never seen such a “complete failure of corporate controls at every level of an organization, from the lack of financial statements to a total absence of any internal controls or governance,” in his years of experience as a restructuring lawyer.

In the leaked document, SBF cited the bankruptcy law firm, Sullivan & Cromwell, as the reason FTX.US was placed under Chapter 11. 

Bankman-Fried stated that the law firm pressured him to file Chapter 11 filings even though he signed the bankruptcy documents. He wrote:

I have screenshots of Sullivan & Cromwell, Mr. Miller, and other people who were influenced by them that total 19 pages and were emailed over the course of two days, urging me to file for Chapter 11 soon as possible.

SBF also targeted Ryne Miller, the general counsel for FTX.US, claiming that he was part of the pressure group pushing for the inclusion of the American-based company in the bankruptcy petition.

In addition to Ray and his legal counsel, SBF intended to hold Changpeng Zhao, CEO of Binance, accountable for what he called “a month of persistent negative P.R. on FTX.”

He mentioned that although Binance “never intended to go through with the deal,” they deliberately signed the letter of intent to purchase FTX.

The disgraced former CEO’s prepared testimony became public following his detention in the Bahamas on Monday at the U.S. government’s request.

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  1. Guest

    The reader may have mixed feelings about the leaked testimony. On one hand, they may be intrigued by the idea of uncovering potentially hidden information and gaining insight into the situation. However, they may also feel concerned about the consequences of the leak and the potential harm it could cause to individuals involved. The reader might be curious to know who is responsible for the leak and whether it was intentional or accidental. Overall, the reader may have a desire for transparency and accountability, hoping that the truth will prevail and those responsible for any wrongdoing will be held accountable.