Cointime

Download App
iOS & Android

Sam Bankman Fried Still Thinks FTT Was “More Legit” Than Most Tokens

On Tuesday, Sam Bankman-Fried (SBF)’s first long-form interview since FTX’s bankruptcy was published to YouTube by citizen journalist Tiffany Fong.

On November 16th, the former CEO offered his perspective on a number of claims made about him since the bankruptcy, and the state of FTX US clients. He also reflected on FTT, the exchange’s native token which he maintained holds more intrinsic value than most other cryptos.

What Caused FTX and FTT to Collapse

Wong began by questioning SBF regarding prior claims that the CEO altered the FTX’s financial records using a “backdoor” that allowed to execute commands without alerting others. This claim was repeated multiple times by Reuters in the days after FTX’s insolvency, adding that the backdoor was used to transfer customer funds to FTX’s sister trading desk, Alameda Research.

“I certainly wasn’t building some backdoor in the system,” answered SBF during the call. “I don’t know exactly what they’re referring to.”

Specifically, Reuters had claimed on November 15th that the backdoor was built by Gary Wang – FTX’s head of engineering. Only Wang, SBF, and his innermost circle allegedly knew about the movement of funds.

Regarding FTT, SBF said that he doesn’t believe the exchange’s token was worthless. “I think its value is more economically underpinned than the average token was,” he said, because of FTT’s buy + burn mechanism, fee discounts, and cash flow.

FTT began November at over $20 but now trades for just $1.31 at writing time. Its price quickly collapsed when Binance CEO Changpeng Zhao threatened to sell $500 million worth of the token on the open market.

SBF denied claims that the token collapsed due to margin calls at Alameda and FTX (in which FTT was used as collateral), or due to the asset’s illiquidity. Instead, he said it was simply a loss of faith in the exchange that led to a massive selloff that tanked its price.

“This was the reaction to news coming out specifically surrounding FTX and Alameda, and their solvency,” he concluded.

Fears around Alameda and FTX’s solvency began to circulate after CoinDesk leaked Alameda’s balance sheet on November 2nd. The sheet showed that Alameda was overexposed to FTT, holding half of the tokens in existence.

Regrets About FTX US Bankruptcy

When FTX filed for bankruptcy on November 11th, it was joined by hundreds of affiliated companies, including both Alameda Research and FTX US.

Bankman-Fried claimed only a day prior that assets at FTX US were “not financially impacted” by the fallout, leaving many confused and angry with him the following day.

The former billionaire told Wong that he was in fact coerced into writing the filing for FTX US and that customers of the American branch still have their assets fully backed. As such, they can expect decent recoveries from bankruptcy – unlike the international exchange.

“FTX US was so fucking solvent that it could absolutely [throw] 250 million dollars to a hat on the way to bankruptcy, [and] it’s still solvent,” he said. “About 500 million over.”

FTX US stopped processing customer withdrawals on-chain as of November 11th.

FTX
Comments

All Comments

Recommended for you

  • SBF ordered to forfeit more than $11 billion

    SBF has been ordered to confiscate more than 11 billion US dollars. SBF has now been sentenced to 25 years in prison.

  • Former CEO of FTX and Alameda Research Sentenced to 25 Years in Prison for Fraud and Money Laundering

    Sam Bankman-Fried, the co-founder and former CEO of FTX and Alameda Research, has been sentenced to 25 years in prison for fraud and money laundering. The judge criticized Bankman-Fried's behavior during the trial and deemed a 25-year sentence to be sufficient. Bankman-Fried's sentence may send a message to the crypto industry and there is no possibility of parole, but he may earn "good time" credit for good behavior while incarcerated. Bankman-Fried was found to have misused over $8 billion in customer funds and will be serving time in prison for his actions. The trial emphasized the importance of not using customers' funds without their knowledge or approval.

  • Web3 AI training company FLock raises $6 million in seed funding

    Web3 artificial intelligence training company FLock has raised $6 million in seed funding led by Lightspeed Faction and Tagus Capital. FLock will use these funds to develop its team and build a federated learning-driven artificial intelligence training platform.

  • Prisma: Vault owners need to prohibit delegation of contracts related to LST and LRT

    The LSD stablecoin protocol Prisma Finance stated in a post that for vault owners, please prohibit delegating authorization of the LST contract starting with 0xcC72 and the LRT contract starting with 0xC3eA.

  • MAS: Singapore is working on global first-tier fund tokenization regulation

    Chia Der Jiun, Managing Director of the Monetary Authority of Singapore, introduced some fund tokenization pilots at an event for asset managers. These pilots are part of the Project Guardian and MAS Global Layer 1 (GL1) tokenization plans. Chia Der Jiun emphasized the advantages of tokenization in real-time settlement and process automation, which can improve efficiency and achieve greater customization of funds. UK asset management company Schroders and fund distribution platform Calastone are exploring this as part of the Project Guardian public blockchain trial in Singapore. A recent survey by Calastone showed that 96% of asset management companies in the Asia-Pacific region plan to launch tokenized products within three years. Chia stated that as these Project Guardian pilot projects approach commercialization, MAS is working with the pilot project managers to study the legal and regulatory treatment and impact of tokenized investment funds."

  • Indonesia's Financial Services Authority to Regulate Crypto Industry in 2025 with Evaluation in Regulatory Sandbox

    Indonesia's Financial Services Authority (OJK) will take over regulation of the crypto industry from the commodities agency Bappebti. Crypto firms must undergo evaluation in a regulatory sandbox before being licensed to operate in the country. The OJK aims to prioritize consumer protection and education, and firms operating without evaluation in the sandbox will be considered illegal. The sandbox provides a safe and isolated environment for testing and innovation development, helping to enhance security and responsible management in the financial sector. Once under OJK's oversight, crypto assets will likely be reclassified as financial instruments.

  • The Shenzhen Illegal Fund Raising Prevention Office issued a risk warning on the "DDO digital options" business

    The Shenzhen Office for Preventing and Dealing with Illegal Fundraising issued a risk warning regarding the "DDO digital option" business. The activities related to the DDO digital option business conducted in the name of Dingyifeng International are essentially the issuance and trading of virtual currencies. According to the "Notice on Further Preventing and Dealing with Risks of Speculation in Virtual Currency Trading" jointly issued by ten departments including the People's Bank of China in September 2021, it is clear that virtual currency-related business activities are illegal financial activities, and overseas virtual currency exchanges providing services to residents within China are also illegal financial activities. The activities conducted by Dingyifeng International in the name of serving residents within China are suspected of illegal fundraising and other illegal financial activities. Our office has organized relevant departments to carry out work, resolutely deal with illegal fundraising and criminal activities, and seriously investigate the legal responsibilities of relevant personnel. (Shenzhen Local Financial Supervision and Administration Bureau)

  • The Hong Kong Legislative Council plans to review the relevant stable currency consultation and sandbox legislation at the end of this year or next year

    Hong Kong legislator Wu Jiezhuang revealed that Hong Kong will release stablecoin consultation and sandbox (computer security mechanism), which will allow the industry to innovate digital asset projects in the sandbox environment. Relevant legislation will be reviewed in the Legislative Council at the end of this year or next year, which will help the entire digital asset industry ecosystem. Hong Kong has been improving the digital asset (virtual asset) market on different legal levels. Last year, there were regulations on virtual currency trading platforms and issuance systems.

  • Vitalik: Humanity needs to create a world where blockchain and artificial intelligence work together

    Vitalik Buterin, the founder of Ethereum, stated at BiddleAsia 2024 held at Signiel Seoul in the Songpa district on March 28 that artificial intelligence is a huge market and its importance is increasing day by day. We need to create a world where blockchain and artificial intelligence work together. Artificial intelligence can now create applications with 100 to 500 lines of code. Vitalik also stated that the ability to write 10,000 lines of code can eliminate most of the bugs in the Ethereum virtual machine.

  • FTX agrees to sell FTX Europe back to its founders for $32.7 million

    Bankrupt cryptocurrency exchange FTX has reached a settlement in a lawsuit in which the company attempted to recover $323 million spent on acquiring a European startup. FTX stated that it paid an excessive fee for a startup that was "unable to launch and operate," and FTX Europe's founder will buy back his company for $32.7 million. It is reported that Digital Assets DA AG was acquired by FTX and renamed FTX Europe in 2021, and FTX stated in a lawsuit in July 2023 that the acquisition was a "huge overpayment" paid with FTX customer funds. According to documents submitted to the Delaware Wilmington Bankruptcy Court on Thursday, FTX stated that no other buyers would agree to purchase its European subsidiary FTX Europe, and the proposed settlement is the best result for FTX creditors. (Reuters) In July 2023, FTX Trading recently sued insiders of FTX's European division, claiming that former CEO SBF paid an obviously high acquisition price. Accounting firm BDO stated that FTX's $376 million acquisition of Swiss startup Digital Assets AG (DAAG) "reasonably represents fair value" and is not improper. DAAG was later renamed FTX Europe.