FTX bankruptcy eyebrows | Forbes SBF intends to testify in the full text

The original title: the bankruptcy bureau midgame | Forbes magazine released SBF intends to testify in full text"

Source: Forbes Magazine

Babywhale, Foresight News

Ahead of FTX's bankruptcy hearing yesterday evening Beijing time, Forbes published drafts of testimony it had obtained from Sam Bankman-Fried that it planned to give at the hearing. It will take time to determine whether the testimony, in which SBF gives a detailed account of FTX's demise, is true.

General situation of

First, I would like to state, under oath, for the record:

I screwed up.

I know that saying sorry doesn't help right now, so I'm going to do as much as I can to do right by my customers. When all is said and done, I will judge myself primarily by one criterion: is the user ultimately compensated? If I fail my users in this respect, I fail.

Last year, my net worth was valued at $20 billion.

Today, I can't say I have nothing. I have a wonderful family and I'm not hungry. That's better than the lives of billions of people. The last time I checked my bank account there was supposed to be $100,000 in it, but I can't be sure because I've been denied access to many of my personal passwords, data, files and accounts.

As of today, neither I nor the former management team of FTX International have access to data that can be communicated to users, the insolvency team, or foreign regulators, all of which are currently controlled by the insolvency team.

Indeed, many of us still do not have access to our own personal data, which is controlled by the leadership of the receivership panel. When we asked for our personal details and password, we were told: "You should reset your 2FA/ password as we recommend to others in the same situation."

As a result, much of my testimony will not be as confident and detailed as I would like. I apologize that I may not be able to answer reasonable questions with confidence. Because I don't have access to most of the current or historical FTX data for confirmation. I also don't have access to most of my own notes, articles, spreadsheets, data, or emails. Ray's team even refused to return my personal account credentials to me.

I deeply regret that I was pressured to sign the papers that led to the Chapter 11 filing, days after FTX International was threatened with insolvency. Among other things, the bankruptcy protection team was pushed into a very difficult position and I am concerned that they were misled by some members of the FTX.US team when they joined. They are trying to manage multiple complex offshore entities and systems without the support of many of the teams that used to manage them. I believe it will be very difficult, if not impossible, for the bankruptcy protection team to move forward constructively without working with the many foreign jurisdictions that have direct regulatory and operational control over FTX International and its subsidiaries.

I've offered to help the Chapter 11 team many times. For example, I could have easily collected some data that they said they couldn't find in court documents, and I received no response to those offers, as well as any other information sent.

I've reached out to Ray and the bankruptcy team countless times. Sometimes I asked for access to my own data, other times I was trying to alert them to information that might be important to their work and to FTX's creditors and customers.

I have sent five e-mails to Ray. Ray never responded or communicated in any other way.

For example, in an email to which Ray did not respond, I wrote: We may provide FTX and its creditors with information regarding future opportunities and financing, as well as relevant financial information regarding FTx.us and potentially relevant regulatory information regarding FTX. I would love to talk to you, whether by email or phone, and I would love to work constructively with you and the bankruptcy protection team to do what is good for the customer/creditor.

As far as I know, FTX.US has always been solvent, is still solvent and could repay all its customers in full tomorrow. Unfortunately, the bankruptcy team has frozen FTX.US and blocked customer access to its account information and funds.

The clients who lost their assets were those trading on FTX International, which does not accept US residents. My primary focus right now is to do the right thing for FTX International users who have been hurt. I am working to make sure that these customers receive compensation as much as possible, and I will continue to do so as long as I see any progress, because it is my responsibility.

I believe that raising billions of additional dollars for FTX International's users is the way to go. That would involve a lot of external financing, which I think would require the FTX exchange to get up and running again. This would be easier if the bankruptcy team worked with the foreign jurisdictions that had oversight over FTX International and it.

I've heard complaints that bankruptcy panels refuse to respond to regulatory inquiries from foreign regulators, sometimes at the risk of putting their employees in jail.

I have heard complaints that bankruptcy teams refuse to respond to regulatory inquiries from foreign regulators, sometimes even at the risk of putting their employees in jail. I have also heard complaints that the bankruptcy team has intervened by freezing or otherwise interfering with funds that should belong to FTX International's various operating entities. I hope these rumors were exaggerated, or at least caused by a lack of familiarity with the company and the industry, and have now passed. Even though it's been a month since the Chapter 11 filing, my linkedin password still hasn't been returned, so I'm not too optimistic.

I owe it to my colleagues and supporters who fight for FTX day in and day out, and who have been deeply hurt by a collapse for which they bear no responsibility.

What happened

This one involves FTX International, a non-US cryptocurrency trading platform for non-Americans that operates out of the Bahamas and is not subject to US regulation. As far as I know, FTX.US, an independent, US-operated exchange, does accept US users and is fully solvent, so all US customers can and should be compensated immediately.

I wish I could give a fuller account of what happened. Unfortunately, I don't have a lot of data on that right now. Here is my version of events from memory:

1) I started Alameda Research, a private cryptocurrency trading firm, in 2017.

2) In 2019, I founded FTX International, a non-US cryptocurrency trading platform for non-Americans. That's when I started transitioning from my role with Alameda Research to FTX.

3) I started FTX.US in 2020, a U.S. cryptocurrency exchange that does accept U.S. users.

4) In reconstructing the events of 2021-2022, I rely on memory and extrapolation, as I did not fully understand many of the key events when they occurred and do not have access to the data that would allow me to confirm or disprove my assumptions at this time. In particular, I have not been running Alameda Research for the past year.

FTX has a derivatives trading service. As with most financial exchanges, users are allowed to trade on margin or leverage. This means that users are allowed to put in less than their position and their repayment obligations are backed by the collateral provided. A significant proportion of FTX clients trade on margin. Alameda Research is one such user.

FTX is licensed and regulated by regulators around the world, including the Bahamas, Switzerland, Japan, Australia, Cyprus and Dubai.

Alameda's assets have plummeted in value over the past year as markets have collapsed.

At the end of 2021, I believe Alameda Research's net asset value (NAV) at market value is likely to be well over $50bn.

I think Alameda probably used maybe 1.1 times more leverage. That is, its corresponding assets are about 90 per cent of its position, with the remaining 10 per cent borrowed. This is about 1/20 of the maximum allowable leverage on FTX and about 1/3 of the leverage taken on by the average FTX margin trader.

In early November 2022, over a three-day period, the market value of the assets held by Alameda Research fell dramatically - I think by more than 50%.

After that crash, Alameda, as I understand it, had assets of about $11bn and liabilities of about $11bn, including its position in FTX. However, many assets are not liquid enough to be sold quickly. I think about $3 billion of assets are highly liquid, leaving a liquidity gap of about $8 billion.

This is a very rough approximation of Alameda Research's net assets and liabilities, in billions. I don't have access to all of this data now, and I didn't know much about it before, so it's likely that the numbers are incorrect or incomplete.

Meanwhile, there was a run on the FTX. About $4 billion a day was being withdrawn by customers after Binion CEO Zhao Changpeng tweeted on Nov. 6 that he would sell his holdings of FTT tokens (Alameda Research has a large stake in FTT).

This has put extreme pressure on FTX and forced it to make margin calls on clients holding positions. Alameda Research was unable to provide sufficient liquid assets for its margin calls and therefore defaulted on FTX International and FTX International was unable to meet its clients' withdrawal requests.

What's the problem?

There must be a lot of things wrong when this happens. Because I wasn't running Alameda at the time, I didn't know about some of the key events at the time. But I was running FTX, which meant that ultimately I had a responsibility to oversee it.

This means that I am ultimately responsible for doing what needs to be done for FTX users.

When the economic environment changed, Alameda Research became insolvent

-Alameda Margin status is sustainable in the economic environment at the end of 2021, with approximately 10% leverage. In 2022, asset prices collapsed as monetary policy tightened, wars and supply chain problems emerged. I think Alameda's assets fell by about 90% during the year, so even 10% leverage is too much.

- The run forced FTX to pay liquidity immediately. That meant FTX had only a few days to add to its large, rather illiquid margin positions. The failure of hedging.

As I recall, Alameda Research was not adequately hedged at the end of 2021; I think its total margin position is about $8 billion, most of which is not on FTX, and it probably has about $2 billion hedged.

By the fall of 2022, I believe Alameda Research has about $8 billion in positions and probably about $8 billion in hedges. However. The crash that occurred in November 2022 was not a broad market crash, or even a broad cryptocurrency market crash. From Nov. 7 to Nov. 9, while bitcoin fell about 17 percent and the stock market was roughly flat, many of Alameda's assets fell more than 50 percent. So Alameda's hedges didn't work.

This is classic "hedge fund risk", and even if some is considered hedging, all of a company's positions can become highly correlated. For example, what happened to Long-Term Capital Management in the 2008 financial crisis.

The use of capital. Piecing together as far as I can recall, Alameda Research's net short margin position in liquid assets of about $8bn was used for roughly the following expenses:

- Interest payments to lenders: about $1 billion;

- Venture capital: approximately $4 billion;

- Repurchase of Binance's FTX shares: about $3 billion;

FTX's internal controls failed

The FTX dashboard

FTX's user position dashboard does not show Alameda's full position. The full size of Alameda's position is not shown on the platform because of past accounting issues. I now think Alameda's position is more than double what it shows. My regular assessment of the riskiness of our positions is often based on the numbers on the dashboard.

Financial data

FTX has audited GAAP annual financial statements which, to the best of my knowledge, are generally correct. However, these were only audits of FTX's corporate finances, not of customer risk.

Risk management

Although FTX International has a team dedicated to finance and many other business areas. But it doesn't have a team dedicated to risk management, or monitoring user positions.

As CEO, I did not do enough to monitor the risks of FTX.

Binance's role in FTX crashes

I won't bore you with this, because in the end I blew it. I will briefly point out the following:

- Starting on November 6, 2022, the value of Alameda's assets fell sharply, hours before Binion CEO Changpeng Zhao tweeted that he intended to sell his FTT holdings.

- The bank run was triggered by Zhao Changpeng's tweet.

- That tweet came after what I believe was a month-long negative PR campaign against FTX driven by Binance.

-Alameda's hedge failed in November 2022 because the crash was against its hedged assets, triggered by the same PR campaign by Zhao Changpeng.

- Around November 8, we made a deal with Zhao Changpeng whereby Binance would acquire FTX at a very low price. We signed a letter of intent stating that we could not talk to other potential investors as long as negotiations with Binance were ongoing. In the interim, several potential investors expressed interest in investments that could repay billions of dollars to users, but I was unable to respond to a letter of intent. A day later Binance announced that they were not going to make an acquisition, as we learned from Twitter. As far as I know, Binance never intended to do this deal.

- About $3 billion was used to buy Binance's shares in FTX because Binance's holdings created KYC problems for FTX: Binance was uncooperative in providing information about CZ to FTX's licensing regulators.

- A few months ago, FTX was widely considered Binance's most important global competitor. Binance captured about 70% of global cryptocurrency trading volume after the FTX crash, up from about 50% before.There are reports that, Binance may be able to gain a larger market share globally due to its market share gains following the FTX collapse and may be able to avoid regulatory enforcement. There's a lot more to be said about Binance, its role in the cryptocurrency ecosystem, and how it relates to FTX. But this is neither the place nor the time.

Given all this, as chief executive of FTX, I made some big mistakes.

1) I think the overriding reason for tying these mistakes together is that I spent most of 2022 knowing less about operational details than I used to.

2) I used to pride myself on keeping my feet on the ground: working every day for the company.

3) But by mid-2022, I think I've spent roughly:

25 percent of the time talking to regulators and policymakers in Washington, D.C., and elsewhere.

Twenty-five per cent of the time is devoted to FTX brand building and new settlement channels, including remittances, financial settlements and sports partnerships.

25% of the time managing FTX's growing workforce.

4) In 2020, that might add up to 25 percent of my time, but in 2022, it's closer to 75 percent. That time is not spent on the actual core products, including risk management.

5) I also pride myself on having a strong work ethic. When FTX started, I used to work 18 hours. But for most of 2022, I believe I'm working about 30 percent less than I'm used to. Even when I'm working, my focus and discipline aren't what they used to be.

6) I thought I could maintain management of the FTX despite expansion, but I was wrong to bite off more than I can chew and ended up not focusing on risk management.

I deeply regret what happened and I would give anything to go back and put detailed oversight and risk management in place.

Right now, I'm focusing on what I can do to get customers compensated and reflecting on what I did wrong. There are many things I wish I had done:

1) I hope that I have always been highly transparent with myself, our staff, our customers and our regulators in running FTX International.

We are transparent about market data, access, fees and many other things. We are not transparent about our assets, margins, positions and risks, even internally, even to ourselves.

I wish I had made sure we built the dashboard to show:

- Total customer balance; Total on-chain balance, and the corresponding address;

- Total bank account and fiat currency balances under FTX's name;

- The total balance of the bank account and fiat currency in the name of the payment institution;

- The total size of margin positions and futures positions, and the amount and type of collateral used to support these positions;

-Handling of margin and risk on all accounts;

I wish we had deployed:

- Public API interface to obtain the above data;

- Private API interfaces that provide anonymous account balance and risk data to regulators for monitoring purposes;

2) I hope that when we have a public API to access the above data, we will be able to provide anonymous versions of account balances and risks to regulators for oversight. I want to be able to communicate openly with our employees, users and community when the cracks start to show, rather than following lawyers' instructions to freeze assets and remain silent when people want to know what's going on.

3) I wish I hadn't clicked a button on Docusign at 4:30am and put some people at FTX under bad leadership. I also regret not taking the advice of my employees and supporters who knew what Chapter 11 meant for our customers. I once received a phone call just before 4:30 from an experienced regulatory adviser whom I greatly trust and respect, suggesting that I should not do so. At the time, I thought he was right, and I consulted my lawyer, who strongly disagreed. Looking back, I can say with confidence that the consultants were right and the lawyers wrong.

4) More importantly: I wish I had stayed grounded and spent at least as much time focusing on and protecting the user's assets and controlling risk as I did on branding and partnerships.

Bankruptcy protection

From November 6 to November 10, I received a large number of calls from potential investors, many of whom may be interested in providing more than $1 billion in financing. Collectively, the amount of financing they can provide far exceeds what is needed to make all their customers reimbursed immediately.

Since November 8, I have been under extreme pressure to file for bankruptcy protection.

1) This pressure mainly comes from Sullivan & Cromwell (S& C) Ryne Miller, Sullivan &, a former partner and General counsel of FTX.US; Cromwell itself.

2) Sullivan & Cromwell is one of the main outside law firms representing FTx. US and FTX International.

I have 19 pages on Sullivan & Screenshots of Cromwell, Ryne Miller, and others I think were influenced by it. I think I was influenced by them, and for two days they all pressured me to file for bankruptcy protection as soon as possible. Some are resolute, some are even "mentally ill". They also called many of my friends, colleagues and family members, forcing them to pressure me, some of whom broke down emotionally, some of whom came right to me and cried.

It was only later that I was told that it was very unusual for such a significant application to be made so quickly.

3) Sullivan & Cromwell chose John Ray to run its bankruptcy team.

4) Sullivan & while I was being pressured to apply; Cromwell's lawyers told my lawyers that I had a choice of who to choose as chairman of the board. A few days later Sullivan & Mr Cromwell quietly backtracked.

5) At approximately 4:30 am on November 10, 2022, against my better judgment, I clicked on a Docusign link that would nominate John Ray as CEO of various entities.

6) Less than 10 minutes later, I received a potential funding proposal for billions of dollars to help clients get their money back.

7) A few minutes later, I instructed my lawyer to withdraw the document; It has become clear to me that this is not the best approach.

8) A few minutes later, my lawyer told me it was too late to withdraw the document and said Sullivan & Cromwell's lawyers filed the paperwork on my behalf, despite my instructions not to.

9) While there was plenty of time to change all that, about six hours later, Sullivan & Cromwell filed the court papers against my express request.

10) John Ray then filed for bankruptcy protection for all entities, including a fully solvent US company, FTX US. They shut down customer access and withdrawals, John Ray and his team appointed Sullivan & Cromwell served as legal counsel to the bankruptcy protection team.

11) John Ray is primarily known for his work on the Enron bankruptcy.

Sullivan & Cromwell recommended John Ray to manage FTX's bankruptcy; After the Enron collapse, Sullivan & The law firms, including Cromwell, received $700m in fees that were supposed to be paid to creditors. (see thelink)

12) So, to summarize, based on what I know: When Enron completed its bankruptcy liquidation, John Ray and S& C paid about $700 million in legal fees. Then, when FTX crashes: pre-S& C partners choose S& C stands for FTX, S& C forced me to sign the bankruptcy filing and filed it against my instructions. S& C chose John Ray as the new chief executive in charge of liquidation. John Ray then chose S& C Managed residual assets, S& C reneged on an agreement to let me choose the chairman of the board, and John Ray appointed the board members.

13) In one copyOfficial statement"The expectation of millions of dollars in legal and advisory fees is driving the bankruptcy team's legal tactics and its overheated rhetoric," said Bahamas Attorney General Ryan Pinder.

14) I'll end this section with a screenshot of a message Miller sent to FTX:

Needless to say, Sullivan & Cromwell didn't really take this seriously on our behalf. However, they did make sure they received $4 million.

As of today, I am still receiving offers of billions of dollars in financing that will likely result in a substantial payout. However, I believe all this is conditional on the FTX reopening as an exchange. I sincerely hope that all the global teams working at FTX are seriously considering this possibility, as I believe it will bring a lot of value to users and creditors. I hope, at the very least, that all FTX entities are prioritising allowing customers access to their account data and history.

However, I admit that I am not optimistic about some parts of the process. I haven't seen Ray's team make any effort to raise a lot of money or restart the exchange. In the days leading up to the bankruptcy filing, Miller said there was no possibility of my planned capital raising. Faced with my desire to keep FTX going, Miller said, "Sam, there's nothing to save."

As of now, FTX.US is closed and US customers cannot even access its account data, let alone withdraw money. As far as I know, FTX.US is solvent and can get all of its customers compensated. I am surprised and sad that this did not happen.

I understand that the Chapter 11 team is already in a very complex and difficult position. I regret putting them in this position; I also regret the negligence that led to the bankruptcy and the excessive haste and improper transfer of control and filing. I have heard a lot of good news about members of the bankruptcy team, especially from Alvarez and Marsal, and believe they could be extremely valuable members of FTX's global process.

Jurisdiction of FTX International

As far as I can tell, the crash that went horribly wrong in early November was all on FTX International. FTX.US is generally unaffected and, as far as I know, still fully solvent.

Delaware currently has several bankruptcy proceedings, including the Bahamas, Australia and others. As far as I know, some relevant facts are as follows:

1.FTX International and FTx.us are two separate entities; Neither entity is a subsidiary of another entity or a subsidiary of the same holding company.

2.FTX International does not accept U.S. users, is not incorporated in the United States, does not employ U.S. labor, is not regulated by the United States, and is operated by non-U.S. entities.

FTX International's terms of service prohibit customers from accessing platforms in the following countries or regions: the United States, Cuba, Crimea, Sevastopol, Luhansk People's Republic, Donetsk People's Republic, Iran, Afghanistan, Syria and North Korea.

3.FTX International has its headquarters and principal offices in the Bahamas.

4.FTX International has nearly 100 employees in the Bahamas and, as far as I know, no employees primarily based in the United States, other than the American counsel.

5.FTX International is regulated in many jurisdictions, including Australia, Cyprus, Switzerland, the United Arab Emirates, Japan and others, but not the United States.

6.FTX International's primary operating entity is FTX Digital Markets LTD (FDM) in the Bahamas.

7. Most of the brains and managers of FTX International work at FDM in the Bahamas.

8. The primary regulator is the Bahamas Securities Commission, which oversees FDM.

9. I think most of the users are FDM customers and most of the assets are FDM customers' assets

10.FDM is not part of the bankruptcy process. Approximately one day before the commencement of bankruptcy proceedings, the Securities Commission of the Bahamas placed FDM under the supervision of a Joint Provisional Liquidator (JPL) and was not included in any bankruptcy documents.

11.JPL has applied to the Delaware Court for recognition as a primary bankruptcy proceeding.

12. I do not believe that Ray or any member of his team is the Chief Executive Officer or a member of the Board of Directors of FTX International's primary operating entity and, therefore, I do not believe that they have legal jurisdiction over FTX International's bankruptcy proceedings.

FTX.US

At least American customers were protected until Ray's team took over.

1) FTX.US is overseen by a number of regulators, including the CFTC, SEC, FINRA and many state regulators, all of which, as far as I know, are in the US. FTX International is overseen by entirely different regulators, none of them US.

2) FTX.US maintains a separate order book, matching engine, and user library.

3) I do not believe that there was any significant liquidation of margin positions at FTX.US during the period in question (or at any other time).

4) It is my understanding that FTx.US has separated its capital from FTX International, at least when John Ray was CEO of FTx.US.

5) In fact, as far as I know, FTX.US is and always has been solvent. I don't think US customers were directly hurt by the events of early November. In fact, all FTX.US customers, regardless of where they live, can and should be paid immediately.

6) As of my last access to FTX.US data (on or about November 10, 2022), FTX.US had net assets (assets in excess of customer liabilities) of about $350 million, and there were no insolvent customer positions or mismatches between assets and liabilities that would have had a significant impact on the above numbers.

7) In view of the above, I believe that:

The assets of US clients were successfully protected;

American customers can be paid immediately;

Us customers should be reimbursed immediately;

8) When John Ray became CEO of FTX.US on November 10, 2022, FTX.US was still in business, still processing customer withdrawals. I plan and expect withdrawals to remain open so that all customers can get paid. I'm surprised that didn't happen.

9) I do not believe that the Chapter 11 process applies to FTX.US, nor do I believe that US customers should be materially harmed by the process without good reason.

misrepresentation

Here are some of the statements I made along the way that I believe were inaccurate or materially misleading:

1) According to the bankruptcy proceedings and the team, John Ray is the Chief Executive Officer of FTX International, but is not the chief executive officer of FTX International's main operating entity.

2) The bankruptcy proceedings and the team's repeated assertions that the Bahamas had unauthorized access to customer funds

- In a filing by the bankruptcy protection team, John Ray said, "There is credible evidence that the government of the Bahamas directed unauthorized debtors' system access to obtain debtors' digital assets - this occurred after these bankruptcy cases were initiated." ;

- The Bahamas is the headquarters of FTX International; The Bahamas Safety Commission is the primary regulator for FTX International;

- The brains and management of FTX International have been in the Bahamas. In addition, prior to the filing of the Chapter 11 documents, the Securities Commission of the Bahamas initiated administrative proceedings with respect to FDM (not included in the bankruptcy proceedings);

- The Bahamas stepped in to protect client assets, fulfilling its responsibilities as the lead regulator of FTX International. At the same time, John Ray's team in the US initiated a seizure of FTX International's assets. FTX International is a Bahamian-operated, Bahamian-regulated company that serves non-US clients;

- Their assumptions about the malevolence and incompetence of other races, cultures, and governments, without evidence, would be seen as highly offensive if directed at minority Americans. But it is equally objectionable when targeted at the citizens of other countries, not to mention their regulators. Meanwhile, seizing assets regulated by other governments would have been considered the most appropriate course of action only a few centuries ago;

3) I think the current bankruptcy team has gone way beyond its mandate.

Many entities have been improperly placed in proceedings by the bankruptcy protection team for reasons that include:

John Ray is not the CEO of these entities;

Originally not owned by FTX, ftx.us or Alameda Research;

They are subject to other global insolvency proceedings that precede and therefore supersede insolvency proceedings;

Not properly filed;

This includes the entities that I believe hold the vast majority of FTX International's client accounts and oversee the vast majority of client assets.

In my opinion, the assets, properties, credentials, passwords, encryption keys, domain names and governance of FTX International should be the responsibility of the Chief Executive Officer, board of directors and/or local regulatory-appointed managers who primarily operate FTX International's core entity.

These entities are the entities that most of FTX International's customers face, control most of FTX International's assets, and are the main brains and managers of FTX International. Ultimate governance of FTX International in the global restructuring process; I hope Mr. Ray and the bankruptcy team agree with me;

I believe that many in the current Chapter 11 team, including Alvarez and Marsal, have made little-noticed efforts to manage a difficult global business, yet their original and current leadership and direction has had the opposite effect. I further believe that the leadership does not have the legal authority to lead the global restructuring and financing efforts, as they are not the current CEO, board of directors or local regulatory-appointed managers of the core entity that primarily operates FTX International. As such, I believe they acted outside their mandate, flouting the law in multiple jurisdictions and misappropriating funds belonging to the principal FTX International entity. I think it would be very useful for the bankruptcy protection team to work constructively with the legally and regulatively recognized global leadership of the FTX International operating entity.

4) In a filing from the bankruptcy protection team, John Ray said about $300 million in FTT tokens were minted by unauthorized sources after the bankruptcy filing. The claim that block browsers will verify that no such casting has taken place is bizarre, adversarial, false, and damaging to the reputation of people, including me.

5) In a document from the bankruptcy protection team, John Ray laid out a chart of FTX customers by jurisdiction, claiming that more than 20% of users were from the Cayman Islands. In fact, less than 1 per cent of trading accounts on the FTX originated in the Cayman Islands, according to data from October 20, 2022.

6) John Ray made various statements in the filing about his team's inability to provide data, including "full list of people working for FTX Group", "daily reconciliation of positions on the chain", and "top 50 creditors including clients".

As far as I know, each of these figures exists, and I am personally able to provide some of them. As far as I know, neither I nor most of the international leadership team have been asked to help solve any of these problems.

I offered to help John Ray. I also alert him to potentially important information about the business. He never answered any of my messages.

7) John Ray complained that the co-founders and potentially others had failed to identify other wallets thought to contain the debtor's assets.

To my knowledge, I have never been asked to identify such wallets. As far as I know, there is no such wallet.

8) I believe that US regulators may have been told materially misleading information about FTX.US, including the claim that FTX.US was insolvent. I believe it is solvent.

In the process, many people made accusations against me. Some of the allegations included poor risk management oversight on my part as chief executive of FTX, but many were untrue.

1. It has been alleged that I personally or through an entity attempted to manipulate the Stablecoin USDT after the November 2022 crash.

This is absolutely false, I have never attempted to fix the price of USDT, nor am I aware of any intent to fix the price of USDT by a company I run or own. Mr. Zhao made one such allegation, referring to a $250,000 transaction. Aside from the fact that the allegations are completely false, it is absurd to suggest that a $250,000 deal would have a significant impact on USDT's price. Zhao Changpeng is knowledgeable enough to know that these claims are both absurd and false.

In addition to Zhao Changpeng, the media also reported that "a Tether official" also believed meAttempting to manipulate the price of USDT.

Once again, I categorically deny the claim. I respect the wisdom and authenticity of the Tether leadership and think they will realize that this claim of manipulation is patently false. I also understand that the media can make up claims, so I hope this is just a case of the media making things up out of thin air, and that Tether executives aren't falling for conspiracy theories.

And, again, I want to make it clear in the official congressional record that it is categorically false that I tried to manipulate the price of Tether. I've made a lot of mistakes this year, but it seems to have given some parties an opportunity to spread absurd, destructive and false claims.

2. There have been claims that certain actions by me or through an entity caused the collapse of Three Arrows Capital this year.

These statements are also categorically false. I have never taken an action designed to trigger the collapse of Three Arrows Capital, and I am not aware of any company that I run or own.

Even if these claims were true, they wouldn't make sense. Alameda Research's own failure was triggered by the market collapse, which in turn triggered FTX's failure; It would be absurd to create a market collapse in order to buy Three Arrows Capital and then in turn bankrupt my own business.

3. False claims have been made about the acquisition of Binance's FTX stake.

On Twitter, Mr Zhao said "we have decided to exit this farce full of lies as investors".

In fact, I contacted Zhao Changpeng in 2021 to begin discussions about buying out his FTX stake.

I initiated these discussions because, among other things, it was becoming increasingly difficult for FTX to work with Mr Zhao as a significant equity owner. Changpeng Zhao was not cooperative in sending his KYC information to the regulatory agencies we applied for licenses.

CZ threatened at the last minute to pull out of the negotiations unless we added about $75 million. We eventually agreed to pay an additional fee of about $75m because we intended to sever our relationship with Binance - which he no doubt guessed and used to his advantage to extract $75m from us in excess of the agreed purchase price.

4. Claimed that Alameda Research had the right to place customer orders on FTX and to "pre-trade" and "trigger user stop-loss".

As far as I know, this has never happened. As far as I can tell, Alameda Research can't get customer orders, let alone want to take advantage of them.

5. Claims that I've stashed billions of dollars.

I know of a bank account with, as far as I know, about $100,000 in it. Although I take out loans from Alameda in my own name, these loans are not usually used for personal consumption or savings; Most of it is invested. I think these loans are being taken out of Alameda's trading profits, which I think should be in the billions of dollars by 2022. I was not involved in the process of any of these loans, which were handled by internal and external lawyers.

As a believer in the effective altruism movement, my primary goal has never been personal wealth; My motivation is to devote myself to bringing joy and relieving pain to others. My personal charitable giving, which began when I was working on Wall Street in 2014, far exceeds what is left in my bank account.

I'm not sure if I can afford all the legal fees I might have to pay. I don't know what to do. But for now, I will not use any funds I can find to pay legal fees, but to bring value to FTX's clients.

6. Conspiracy theories about me, Ukraine and the DNC.

Any suggestion that I conspired with the Ukrainian government, other than what I said about contributing to Ukrainians and their defense, is not only false, it is deeply offensive. Any theory that American political parties are further involved in such conspiracies is in itself flat-out wrong and offensive.

7. Various claims that I created a "party culture" at FTX.

Our "party" consisted mainly of dinner and board games.

I didn't have my first drink until I was 21 and never got drunk.

8. Various claims that I am Jewish.

That's technically true. My name is Samuel Benjamin Bankman-Fried, and most of my ancestors arrived at Ellis Island in the first half of the 20th century; Let the reader guess why they came.

But I don't think I need to elaborate on the impact of this.

Various theories have suggested that I was taking Emsam for stimulation or for Parkinson's disease.

Emsam patches were essentially never specified as prescriptions for Parkinson's disease. This theory is likely the result of a simple search on the Internet; Selegiline is the chemical underlying Emsam and is sometimes used in oral form to treat Parkinson's disease.

I do have a prescription for Emsam, about ten years old. I take it every day as an antidepressant. People don't usually talk about their personal medical conditions, but with so many paparazzi taking pictures of my belongings and analyzing them online, I had no choice.

The past few months have been difficult for everyone, and by contrast, I feel I need to make a note on the official congressional record that I have regrets not just now, but for most of my adult life.

I have made a lot of mistakes this year, but these are not my mistakes.

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