FTX Insolvency Claims Criticized: SBF Blames Lawyers for $138B 'Lost Value'

Sam Bankman-Fried (SBF) has reignited controversy with a new report asserting FTX was never insolvent and accusing its bankruptcy lawyers of destroying $138 billion in value through unnecessary filings and asset sales.

SBF’s Report: FTX Was Always Solvent

In the report “FTX: Where Did The Money Go?”, SBF claims FTX held sufficient assets to repay customers in full at the time of its November 2022 collapse and today. He alleges bankruptcy lawyers, led by John J. Ray III and Sullivan & Cromwell, seized control for self-interest, filing for bankruptcy to collect fees despite solvency. SBF argues $15 billion in assets—including crypto, ventures, and real estate—could have covered claims, but lawyers sold them at “fire-sale” prices, wiping out $120 billion in potential value.

• Asset Valuation: Anthropic stake sold for <$1B (now $183B); Robinhood shares $600M (now $7B); 58M Solana $3.3B (now double).
• Lost Value: $138B total, including $8B claims, $1B fees, and sales.
• Quote: “FTX was never insolvent… $120 billion of lost value so far.”

The report contrasts with SBF’s 2023 fraud conviction and 25-year sentence, suggesting mismanagement, not fraud, caused the downfall.

ZachXBT’s Rebuttal: Ignoring Liquidity Crisis

Blockchain investigator ZachXBT swiftly criticized the report on X, calling it “misleading” and accusing SBF of shifting blame. ZachXBT argued repayments were based on November 2022 prices, causing massive losses for holders of appreciating assets like SOL or BTC. He dismissed illiquid investments’ current values as coincidental market rebound, not proof of 2022 solvency. ZachXBT emphasized FTX’s lack of liquidity for withdrawals, labeling SBF’s claims a repeat of prison-learned misinformation.

• Key Criticism: “Creditors were paid from crypto prices at the time of the FTX Nov 2022 bankruptcy… Illiquid investments worth more today are just a coincidence.”
• Liquidity Focus: FTX couldn’t fulfill 2022 withdrawals despite assets.

ZachXBT’s response, garnering 10,000+ likes, underscores ongoing skepticism toward SBF.

Broader Implications for Crypto

The report revives debates on bankruptcy processes, highlighting “fire-sale” sales and $1 billion in fees’ impact on stakeholders. It questions dollarized vs. in-kind repayments, eroding trust in exchanges during volatility. Community backlash illustrates blockchain investigators’ role in fact-checking, amid DeFi’s $150 billion+ TVL.

In summary, SBF’s insolvency denial and lawyer blame, refuted by ZachXBT, highlight lingering FTX fallout, urging transparent asset handling in crypto’s maturing ecosystem.