Sam Bankman-Fried, also known as SBF, the founder of the defunct cryptocurrency exchange, has published a post-mortem on the FTX-Alameda crash. The former CEO has outlined the convergence of three significant occurrences that ultimately caused the company’s downfall. The final one placed the blame on Changpeng Zhao, otherwise known as CZ, the CEO of Binance.
The first occasion, in accordance with Bankman-Fried, was Alameda’s statistics in 2021. The net asset value on its balance sheet was close to $100 billion. In contrast, net borrowing and available cash were $8 billion and $7 billion, respectively. The investment arm’s failure to “sufficiently hedge its market exposure” was the second occurrence. And the stock and cryptocurrency markets lost the majority of their value through 2022.
The crypto tycoon mentioned the CEO of Binance as the final and subsequent reason, saying,
“In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent.”
A market frenzy resulted after Binance’s CEO’s announcement that it would sell all of its remaining FTT tokens following a revelation that Alameda’s balance sheet consisted primarily of FTT. According to CZ, this action was taken as part of its “post-exit risk management,” and they “won’t pretend to make love after divorce,” they added.
SBF stated in his post-mortem,
“But the November crash was a targeted attack on assets held by Alameda, not a broad market move. Over the few days in November, Alameda’s assets fell roughly 50%; BTC fell about 15%–only 30% as much as Alameda’s assets–and QQQ didn’t move at all”
SBF Blames Binance CEO’s Targeted Crash
According to SBF, this caused “Alameda’s contagion” to spread to FTX and other organizations. Additionally, Bankman-Fried argued that FTX US was totally solvent and should be able to make its clients whole again despite the demise of both organizations.
Additionally, according to SBF, FTX US had more than $350 million in net cash when John Ray took over as CEO and the exchange started the bankruptcy process. He asserted that net cash exceeded customer balances and called the time it took for customers to receive their money back “ridiculous.”
Additionally, the former CEO asserted that he had “offered” all of his Robinhood shares to investors, adding that it would have been 100% if the bankruptcy team had assumed responsibility for D&O legal expense indemnification.
The former CEO said,
“FTX International has many billions of dollars of assets, and I am dedicating nearly all of my personal assets to customers.”
