He goes further to say that if it hadn’t been for rival Changpeng Zhao’s “fateful tweet, following a months-long extremely effective PR campaign against FTX,” Alameda and FTX International would have been fine.
History will remember that it was the decision by Zhao, co-founder and CEO of Binance, the largest cryptocurrency exchange by trading volume, to sell $530 million worth of FTT that marked the beginning of the end for the Bankman-Fried empire. FTT was the cryptocurrency issued by FTX.
Zhao is known as CZ in the crypto space.
When this decision was announced on November 6, a run on the platform by panicked FTX clients followed.
“A bank run required immediate liquidity, liquidity that Alameda no longer had,” Bankman-Fried wrote.
“And so when Alameda became illiquid, FTX International became illiquid as well, because Alameda had an open margin position in FTX; and the run on the bank turned that illiquidity into insolvency.”
This latest version of SBF is based on calculations made by the old trader. He says that the figures given are based on his memory.
Bankman-Fried avoids hot topics, however.
He doesn’t talk about the accounting issues that Ray and the regulators have raised. It also does not address the allegations that FTX client funds were transferred to Alameda. He is not addressing the allegations that he used FTX funds for personal expenses, buying luxury villas and that the platform served as his personal bank.
But the federal prosecutors’ case may be solidified by two of their former lieutenants who are cooperating with the prosecution.
Zixiao (Gary) Wang, 29, a co-founder of FTX and a former CTO, and Caroline Ellison, 28, a former CEO of Alameda Research, have pleaded guilty to multiple federal fraud charges.
Bankman-Fried was extradited to the US on December 21 by authorities in the Bahamas, where he lived and where FTX is headquartered.
He was released after his parents, both law professors at Stanford University, signed a $250 million acknowledgment bond pledging their California home as collateral. Two other friends with significant assets also signed, according to news reports.
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