FTX founder and former CEO Sam Bankman-Fried "froze up in the face of pressure" as his company collapsed, he wrote in a new letter sent to employees of the company he once helmed.

In the letter, shared internally in FTX's company Slack and obtained by CoinDesk, Bankman-Fried said he felt "deeply sorry about what happened" and what that meant for the company's employees. He did not address allegations that FTX diverted customer and corporate funds to prop up Bankman-Fried's Alameda Research, revelations that Alameda had an exemption from FTX's normal liquidation process or statements that Alameda had loaned funds to FTX officials including himself.

"I didn't mean for any of this to happen, and I would give anything to be able to go back and do things over again. You were my family," he said. "I've lost that, and our old home is an empty warehouse of monitors. When I turn around, there's no one left to talk to."

"I froze up in the face of pressure and leaks and the Binance [letter of intent to purchase FTX] and said nothing," he said.

Bankman-Fried stepped down as CEO of FTX on Nov. 11, right before his company filed for bankruptcy. He is not a current employee of the company, new CEO John Ray III has said after Bankman-Fried tweeted multiple threads and spoke to a reporter about the company. Tuesday's letter to FTX employees was posted by a current employee, as Bankman-Fried no longer has access to the company Slack.

According to Bankman-Fried, FTX had around $60 billion in collateral and $2 billion in liabilities this spring, but a market crash meant the collateral's value was halved.

The "drying up" of credit in the industry further meant FTX's collateral was worth around $25 billion, though his liabilities measurement jumped to $8 billion.

Another crash in November "led to another roughly 50% reduction in the value of collateral over a very short period of time," which he valued at $17 billion at the time.

The bank run, caused by what Bankman-Fried termed "attacks" in November, reduced another $8 billion in collateral, he said.

"As we frantically put everything together, it became clear that the position was larger than its display on admin/users, because of old fiat deposits before FTX had bank accounts," he said. "I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash."

Bankman-Fried "did not realize the full extent of the margin position" or the risk that a correlated crash meant, he said.

"The loans and secondary sales were generally used to reinvest in the business – including buying out Binance – and not for large amounts of personal consumption," he said.

Bankman-Fried did not address concerns that customer funds were sent from FTX to Alameda, which were raised anew during the company's first bankruptcy hearing earlier Thursday.

James Bromley of Sullivan & Cromwell, who presented FTX's current state of affairs at the hearing, said "substantial funds appear to have been transferred" to Alameda from other companies within the FTX umbrella, some of which were invested in crypto and technology ventures.

"There were also substantial amounts of money that were spent on things that were not related to the business. For instance, one of the U.S. debtors is a an entity that is operated that purchased almost $300 million worth of real estate in the Bahamas," Bromley said. "Based on preliminary investigations, most of those real estate purchases [were] related to homes and vacation properties that were used by senior executives."

Still, the document provides insight to Bankman-Fried's thinking, including his apparent belief that he should not have filed for Chapter 11 bankruptcy, which he first told a Vox reporter last week.

FTX filed for bankruptcy due to "an extreme amount of coordinated pressure," which Bankman-Fried said he agreed to "reluctantly."

"Maybe there is still a chance to save the company," he said in the letter Tuesday. "I believe that there are billions of dollars of genuine interest from new investors that could go to making customers whole. But I can't promise you that anything will happen, because it's not my choice."

SBF writes letter of apology to employees.

-mentions nothing of all the diverted customer and corporate funds to Alameda
-mentions nothing of the $1.6 billion loaned to FTX officials, including $1 billion to himself


Separately, lawyers at Sullivan and Cromwell said in court that FTX spent over $300 million on real estate in Bahamas, which is substantially higher than the $121 million that Reuters previously uncovered.





https://www.coindesk.com/business/20...ternal-letter/

The letter is really incredible. It meant that either:

A. He hasn't hired a lawyer yet
or
B. He's decided the situation isn't that serious and he thinks he can talk his way out of it, against his lawyer's advice

Just wow.

See above. His lawyer dropped him, most likely due to him flapping his gums too much to journalists, on twitter, etc.

Whole thing is fascinating. Most people in these situations are so high on their own BS, they don't know when to stop digging.

Only other theory is that he paid the right people in the Bahamas to keep him from being extradited.

SBF writes letter of apology to employees.

-mentions nothing of all the diverted customer and corporate funds to Alameda
-mentions nothing of the $1.6 billion loaned to FTX officials, including $1 billion to himself


Separately, lawyers at Sullivan and Cromwell said in court that FTX spent over $300 million on real estate in Bahamas, which is substantially higher than the $121 million that Reuters previously uncovered.

Edit: It's the same guy that wrote the first NY Times puff piece - David Yaffe-Bellany

Lmao. Twitter had to fact-check the WSJ tweet.

https://twitter.com/WSJ/status/1594801607580864513

This guy has been putting together really good videos. He has the same sentiment I have. When I put together that list of all the corporate controls they were lacking in post # 208, I noted how they set all their comms to auto-delete after a short period of time, so there would be no records of decision making or anything that leadership did. SBF would encourage all his employees to set their comms and chats, etc to auto-delete. Coffeezilla goes into this and explains how this was no accident, and all rather deliberate.

The irony of liberals buying cars that funded the guy who is destroying their propaganda arm

So ummm….What are the odds the FBI pulls him off the stage at the Dealbook summit?

What does that say about our country if it doesn't happen?

Personally, I think he shouldn't even make it to the Dealbook summit in NYC. They should pick him up at the airport instead.

Getting pulled off the stage would be awesome, too, though.

who’s going to play him in the upcoming movie?

So ummm….What are the odds the FBI pulls him off the stage at the Dealbook summit?

What does that say about our country if it doesn't happen?

Personally, I think he shouldn't even make it to the Dealbook summit in NYC. They should pick him up at the airport instead.

Getting pulled off the stage would be awesome, too, though.

They will handle him with kid gloves and send him to Club Fed because of his political contributions.

h3h3