SBF Leaked Testimony – Who Is To Be Blamed?

SBF leaked testimony

It was revealed to Forbes on Tuesday morning that Sam Bankman-Fried would testify to Congress on Tuesday if he hadn’t been detained in the Bahamas the previous evening.

The creator of the defunct cryptocurrency exchange FTX, Sam Bankman-Fried, was due to appear before the U.S. House of Representatives Committee on Financial Services on Tuesday. 

But at the request of the American authorities, he was detained in the Bahamas late on Monday afternoon.

SBF blamed the current CEO, his legal counsel, without admitting any wrong on his part.

Sam Bankman-Fried, the former CEO of FTX, also known as SBF, was detained on December 12, the day before he appeared before Congress via video conference.

What did he claim?

According to a copy of his testimony that Forbes was able to get, the disgraced CEO intended to blame for the ghostly collapse of his $32 billion business squarely on everyone else’s shoulders.

In his testimony, SBF reiterated the same arguments regarding FTX.US, the worldwide bitcoin exchange’s sibling firm. 

Despite being a part of the Chapter 11 bankruptcy filing on November 11, he asserted that the corporation, with its headquarters in the United States, was still “totally solvent.”

According to Bankman-Fried, “I regret putting some of FTX in the hands of toxic leadership by clicking a button on Docusign at 4:30 in the morning.”

He continued by blaming John J. Ray III, a restructuring attorney who took over as FTX CEO following the bankruptcy filing, for including FTX.US in the Chapter 11 bankruptcy. “American clients were safe, at least until Mr. Ray’s team took over,” according to SBF.

On the other hand, the former CEO of FTX and his managerial abilities have drawn harsh criticism from Ray. 

Ray stated in his testimony for the FTX investigation hearing that he has never witnessed such an “utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever” in his years of experience as a restructuring lawyer.

SBF cited the bankruptcy law firm, Sullivan & Cromwell, in the leaked document as the reason FTX.US was placed under Chapter 11. 

Bankman-Fried said that the law firm pushed him to file Chapter 11 filings even though he signed the bankruptcy documents. He wrote:

I have screenshots of Sullivan & Cromwell, Mr. Miller, and other people who were influenced by them that total 19 pages and were emailed over the course of two days, urging me to file for Chapter 11 soon as possible.

Ryne Miller, the general counsel for FTX.US, was also targeted by SBF, who claimed he was a member of the pressure group pushing for the inclusion of the American-based company in the bankruptcy petition.

Along with Ray and his legal counsel, SBF intended to hold Changpeng Zhao, CEO of Binance, accountable for what he called “a month of persistent negative P.R. on FTX.”

He stated that although Binance “never planned to go through with the deal,” they deliberately signed the letter of intent to purchase out FTX.

The public became aware of the disgraced former CEO’s prepared testimony following his detention in the Bahamas on Monday at the U.S. government’s request.