Sam Bankman-Fried, also known as SBF, was supposed to testify in Congress about FTX’s collapse last Tuesday, but he was arrested the day before that.
However, Forbes got a copy of his testimony, which shows that he has planned to blame CZ along with others for the downfall of his multibillion-dollar empire.
Why Did SBF Plan To Blame CZ?
After tweeting that he planned to sell all of Binance’s holdings of FTX’s native token, FTT, which caused a bank run on FTX and led to its collapse, CZ has taken most of SBF’s blame for why the crypto company failed.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
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CZ 🔶 Binance (@cz_binance) November 6, 2022
Therefore, it’s no surprise that SBF planned to bring up most of his attacks again on Tuesday. One of these attacks claimed that CZ and Binance were responsible for “what I believe to be a month of sustained negative PR on FTX”
As FTX tried to figure out what to do, Bankman-Fried signed a letter of intent for Binance to buy his company. This made it impossible for FTX to talk to other investors.
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
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CZ 🔶 Binance (@cz_binance) November 6, 2022
“During that time, I received serious expressions of interest from multiple potential investors who represented billions in capital that could have gone to customers,”
SBF wrote in his prepared remarks. “I was inhibited in responding by the LOI.”
In the end, SBF said he found out about Binance’s decision to back out of the deal through Twitter. “As far as I can tell, Binance never meant to complete the deal.”
Besides CZ, SBF also plans to blame other people for this mess. Here is the complete list of the people he planned to drag with him in his congressional testimony:
John Ray
Even though SBF “clicked on a Docusign link that would name John Ray as the CEO of various [FTX] entities,” he said that Ray is not the CEO of FTX International and that “American customers were protected, at least until Mr. Ray’s team took over.”
“When John Ray became CEO of FTX US on November 10th, 2022, FTX US was still operational, and still processing customer withdrawals,” SBF stated in his testimony, offering no further insight into the exchange’s current state.
“I intended and expected for withdrawals to remain open, making all customers whole. I am surprised that did not happen,” he claimed.
Moreover, SBF also said that he had talked to Ray and his team “many times,” sometimes to get access to his own data. And, on occasion, to inform them of important information that may be relevant to their jobs and responsibilities to FTX’s creditors and customers.
“Mr. Ray has never responded, nor has he reached out to me to communicate in any other ways,” he added.
Sullivan Cromwell
SBF intended to spend the majority of his testimony criticizing Sullivan Cromwell for the events that followed FTX’s demise.
When the crypto exchange fell apart, FTX hired a bankruptcy law firm to help it through the Chapter 11 process.
SBF has expressed regret for filing for Chapter 11 for FTX US since the start of his apology tour.
Despite the fact that he eventually decided and signed the paperwork, SBF claims that “S&C pressured me to file Chapter 11 documents, and filed the documents despite my instructions not to.”
“I have 19 pages of screenshots of Sullivan & Cromwell, Mr. Miller, and others I believe were influenced by them, all sent over a two day period, pressuring me to quickly file for Chapter 11,” he planned to tell Congress.
In his testimony, he accuses Sullivan Cromwell and Ray of having a financial motive in not releasing payments for FTX US customers.“Roughly $700 million (!) in fees were paid to law firms that represented Enron from cash that would otherwise have gone to creditors,” he planned to add.
“Needless to say, Sullivan & Cromwell has not made sure that we are all represented through this,” SBF wrote.“They have, however, done a good job of making sure they were wired $4 million.”
Ryne Miller
SBF also criticized Miller, FTX US’s general counsel, for participating in the so-called pressure campaign to force FTX US to file for Chapter 11.
He presents a text message from Miller to FTX leadership in which he requests $4 million in legal fees from Sullivan & Cromwell.
“I’m in charge now,” Ryne stated in a screenshot.
SBF thinks that Miller worked with Sullivan & Cromwell to force him to file for Chapter 11 even though he got “a lot of calls from potential investors.”
He said that Miller had told him “that a capital raise was a 0% likelihood…” Besides that, he said that in response to his desire to keep FTX active, Mr. Miller said, “There’s nothing to save Sam.”
Conclusion
With everything that has happened, we don’t think any of SBF’s words have any value at this point.
His testimony sounds like he’s trying to wash his hands and blame others for all the mess he brought upon himself.
Furthermore, there will still be further developments regarding this FTX issue.
Therefore, to keep updated, make sure to follow our news section here.
