Sam published “FTX Pre-Mortem Overview”: Highlights Reasons for Failure 

• Sam published an extensive Substack article on Thursday. 
• The article says that both FTX and Alameda were doing great in 2021. 
• Further highlights the reasons for the collapse and his commitment to repay creditors.

Former crypto white knight Sam Bankman-Fried recently published an extensive Substack article on Thursday titled “FTX Pre-Mortem Overview.” He tried to explain what went wrong, highlighting the reasons that caused the once third-largest crypto exchange to file for bankruptcy. He claimed that Alameda and FTX were doing very well in 2021 until the crypto winter began in 2022. 

The post further reads.

“FTX International and Alameda were both legitimately and independently profitable businesses in 2021.”

Further explaining his point, Sam says that when Three Arrows Capital and other firms collapsed in the spring of 2022, the whole environment turned grim. Resulting in a depletion in asset values of almost every major token; even Bitcoin, Solana and others in the range were also affected badly. 

Three Arrows’ major losses that caused its fall took along Voyager and others. Last year, Alameda also lost nearly 80% of the value of its assets, which eventually brought down FTX. He further clarifies that certain figures may be inaccurate as he does not access the said records for better assessment. 

Further adding to the report, Bankman says that all his passwords are under the custody of the Chapter 11 team, and if they are willing to share some data to add to this report, they are welcome to do so. 

Although Sam stepped down as CEO of FTX in November around the time of bankruptcy filing, which is now run by new CEO John J. Ray III, who is accusing Bankman and his deputies of inexperience, haphazard bookkeeping, and incompetence, however, SBF still regrets the decision. 

Further pressing that FTX US is still solvent, there are still chances that the customers could expect substantial recovery. Although FTX International still has assets worth billions of dollars, Sam explained that he is also dedicating almost all of his cash towards recouping customers. 

Wednesday’s hearing was somewhat fruitful as FTX is said to have located more than $5 billion in assets, which will be used to repay creditors. Meanwhile, the amount the exchange owes to all its creditors is still unknown. 

On January 3, 2023, Sam Bankman-Fried pleaded not guilty to all eight counts of wire fraud and conspiracy levied against him. At the same time, the trial is expected to start sometime in October. Former CTO Gary Wang and Alameda’s Caroline Ellison had already pleaded guilty to the charges and probably would be speaking against him in trials. 

The FTX case is important, especially for the crypto industry. Being one of the biggest events in recent history, it will help lawmakers access the industry and make required regulations. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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