Sam Bankman-Fried Disputes FTX US ‘Shortfall’ Claims, Critics Skeptical of Excel Spreadsheet Defense

Sam Bankman-Fried Disputes FTX US 'Shortfall' Claims, Critics Skeptical of Excel Spreadsheet Defense

Following an update from FTX debtors about the $5.5 billion discovered by administrators during an investigation, former FTX CEO Sam Bankman-Fried (SBF) took to Twitter to share a blog post from his Substack newsletter. SBF stated that the presentation published by litigation firm Sullivan & Cromwell is “extremely misleading” and that FTX US is solvent and “always has been.”

SBF Claims Misrepresentation by Litigation Firm, Twitter Critics Doubt Solvency

Sam Bankman-Fried (SBF) is providing additional information in response to the recent press release and 20-page presentation document issued by FTX debtors and current restructuring administrators. The press release reported that investigators found $5.5 billion in liquid assets. In response, SBF posted a new blog on his Substack newsletter and stated on Twitter, “FTX US is solvent, as it always has been.” The blog post echoes this statement and asserts discrepancies between Sullivan & Cromwell’s (S&C) reporting and SBF’s spreadsheet.

Sam Bankman-Fried Disputes FTX US 'Shortfall' Claims, Critics Skeptical of Excel Spreadsheet Defense

He disputes the assertion in the presentation that FTX US has a “shortfall” and maintains that FTX US is not insolvent. “S&C claims that FTX US has a shortfall,” SBF said in his latest blog post. “That claim is false. Based on S&C’s own data provided in the same court presentation, FTX US had roughly $609 million of assets ($428 million in bank accounts, plus $181 million in tokens) backing roughly $199 million in customer balances. FTX US was solvent when it was turned over to S&C, and almost certainly remains solvent today.”

Despite SBF’s claims, several people on social media mocked the FTX co-founder and specifically criticized his Excel spreadsheet. “Bro typed out a couple of numbers in 5 mins thinking it’s gonna be his get out of jail free card,” one person tweeted in response to SBF’s latest blog post. “Nice Excel sheet that a 5-year-old could make — LOL — Means nothing. Somebody shut this dude up forever,” another person wrote. SBF’s claims were met with skepticism and his declarations did not appear to be convincing to many.

Sam Bankman-Fried Disputes FTX US 'Shortfall' Claims, Critics Skeptical of Excel Spreadsheet Defense

Missing Funds, Lack of Auto-Liquidation Issues, and ‘Questionable FTX US Redemption System’ Remain Unaddressed by Former FTX CEO

A number of people questioned why SBF did not comment on the $10 billion in missing funds and once again, his blog post did not address the accusations made in the presentation. For example, following SBF’s last blog post, Bitmex co-founder Arthur Hayes criticized the FTX co-founder for not addressing the lack of auto-liquidation associated with Alameda Research. The latest presentation from FTX debtors claims “Alameda Research and a small group of individuals had the ability to remove assets from the exchange.” Furthermore, the removal of funds was never recorded on the company’s ledger, and the funds allegedly derived from FTX exchange customers.

SBF did not address that specific subject at all. It is absent from his argument against Sullivan & Cromwell’s presentation. People on Twitter brought this up to SBF on other Twitter threads about the subject, as SBF’s tweets are set to “private” mode and cannot be commented on. “This does not explain the allegations of embezzlement to which your colleagues have pleaded guilty,” one person on Twitter tweeted in response to SBF’s latest claims. One person told the media that SBF’s claims appear to be intentional “misdirection” and “potentially for legal/defense purposes.”

It is safe to say that Bankman-Fried’s claims and recent blog posts are not being taken seriously, and his Excel spreadsheet method is not convincing the general public. Some people wondered if SBF was “presumably tweeting against the advice of legal counsel.” The latest blog post was not much different from the last post SBF wrote, as they both fail to explain a number of issues raised by Bankman-Fried’s co-workers — former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang. Furthermore, evidence has emerged about how “traders may have used a questionable FTX US redemption system” for Solana-bridged assets.

Sam Bankman-Fried Disputes FTX US 'Shortfall' Claims, Critics Skeptical of Excel Spreadsheet Defense

Conor Rogan, a director at Coinbase who frequently tweets about onchain activities, said this redemption scheme could complicate the bankruptcy process. “From November 9th until withdrawals were halted a few days later, traders may have used a questionable FTX US redemption system to funnel [tens of millions] out of the exchange,” Rogan said. “This could complicate bankruptcy proceedings and further call into question FTX-FTXUS separation claims,” he added. Rogan discussed a synthetic Solana-based bitcoin (BTC) token called “sollet (soBTC)” which broke its peg when FTX’s troubles were engulfed in flames. Despite the financial issues, FTX US still processed sollet redemptions on a 1:1 basis.

The redemptions still occurred while sollet was trading for much lower than BTC’s spot price, and Rogan believes the “toxic redemptions” or “swapping unbacked ETH and BTC” led to the potential loss of over $40 million. “FTX US would presumably have 1,700 real BTC, instead of 1,700 soBTC worth near-zero on the open market today,” Rogan tweeted. The onchain researcher noted, however, that the evidence was his own “speculative findings based on research into FTX US’s Solana address and discussions with members of the Solana community.” Notably, following Rogan’s Twitter thread, SBF decided to reply to the claims made.

“I’m fairly confident that FTX US’s excess cash on hand is much larger than the size of the wrapped asset issue to the extent there is one,” SBF wrote in reply to Rogan’s Twitter statements.

Once again, SBF’s comment about the sollet (soBTC) issue was met with skepticism and criticism shortly after he published the tweet. “You just said they were solvent. Now you’re ‘fairly confident?’” one person asked the FTX co-founder. “I’m fairly confident you will spend a long time in federal prison,” another individual tweeted. Rogan’s Twitter thread and SBF’s response further highlight that people do not seem to be accepting the former FTX CEO’s statements. “Nobody believes anything you say and they never will,” one person replied to SBF’s sollet commentary on Twitter.

What are your thoughts on Sam Bankman-Fried’s claims of FTX US’ solvency and the accusations of embezzlement and missing funds? Leave your comments below.

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