SBF speaks from prison: Accuses bankruptcy process of "destroying" the FTX that could have been saved

The founder of the now-defunct cryptocurrency exchange FTX, SBF, stated in a 15-page declaration that this once leading player in the crypto world never actually faced insolvency. According to documents recently released by SBF’s team, at the time of the crisis in November 2022, FTX and its sister company Alameda Research still held assets worth $25 billion and equity valued at $16 billion, enough to cover the $8 billion in customer withdrawals at that time.

This declaration once again challenges the court’s previous findings. SBF had attempted to present the same argument during his trial, but was prevented by the judge from submitting evidence supporting “FTX’s solvency.” Now, while in prison, he has reorganized his thoughts, claiming that the company could have survived if not for the forced takeover by external legal advisors, which caused the situation to deteriorate rapidly.

Liquidity Crisis vs. Total Bankruptcy — The True Distinction in SBF’s Controversy

In his statement, SBF repeatedly emphasizes a key distinction: in November 2022, FTX was facing a “liquidity crisis,” not a true bankruptcy. Simply put, the company lacked short-term cash flow, not long-term debt repayment ability. According to SBF, this crisis could have been resolved by the end of the month.

However, everything changed after external legal counsel forcibly took control of FTX. SBF believes that this transfer of power completely destroyed the company’s chance to recover. Based on the data he provided, without this intervention, Alameda’s holdings of FTX equity plus the company’s assets would now be worth approximately $136 billion.

Bankruptcy Lawyers and the New Management: Who Should Be Responsible for the Company’s Fate?

The declaration directly names FTX’s new CEO John J. Ray III and the bankruptcy lawyers, accusing them of deliberately leading the company into unnecessary bankruptcy proceedings, delaying repayments, and significantly reducing the amount that could be repaid. SBF believes these legal professionals have a “strong motivation” to push for bankruptcy and have portrayed FTX as a “hopeless mess” with no rescue value.

What further frustrates SBF is that the bankruptcy team paid nearly $1 billion in fees to consultants. Meanwhile, they canceled claims on $7 billion worth of FTT tokens as “worthless paper,” significantly undervaluing the company’s true assets. SBF alleges that these operations completely disregarded company records and artificially created an illusion of asset devaluation.

Chain Reaction in the Crypto Market — From FTX to Industry-Wide Impact

Court documents previously revealed that Alameda Research had “secret backdoor” access to FTX customer funds, allowing them to borrow funds without collateral for leverage operations and token purchases. Once this mechanism was exposed, market panic triggered a massive bank run, ultimately revealing an $8 billion funding gap.

At the end of 2022, SBF was arrested in the Bahamas. In March 2024, a U.S. court sentenced him to 25 years in prison on charges of fraud and conspiracy. This crisis not only led to the bankruptcy of FTX and Alameda but also caused a domino effect across the entire cryptocurrency market, with approximately $200 billion in market value evaporating.

Prison Pardon Dreams — SBF’s Path to Political Redemption

Currently incarcerated, SBF has not given up hope. He claims to have been “wrongfully convicted” and is actively seeking a pardon from U.S. President Donald Trump. Trump has previously pardoned Silk Road founder Ross Ulbricht and Binance co-founder Zhao Changpeng (CZ), opening a window of hope for SBF.

Recently, SBF also posted on the conservative social platform GETTR, claiming that his arrest and sentencing were due to a shift in election donation strategies—from supporting the Democratic Party to the Republican Party—and that he was subjected to “political retaliation” by the Biden administration. While this claim is difficult to verify, it reflects that SBF is still exploring the possibility of turning his legal troubles into political issues. His appeal is ongoing, and the prospects for a pardon remain uncertain.