SBF renews claim that FTX was solvent despite $8B liquidity gap

Source Cryptopolitan

Sam Bankman-Fried (SBF) renewed his claim that FTX was solvent at the time of its collapse. In the latest post, he cited a sworn declaration from the exchange’s former head of data science. This comes in with SBF’s pursuit of a new trial from prison.

In a post on X made via proxy, SBF brought Dan Chapsky’s memo to the notice. He mentioned that no one was more qualified to assess the company’s financial position. However, Chapsky had been hired by bankruptcy lawyers to calculate whether the exchange was solvent.

FTX had $8B liquidity gap but was ‘still solvent’

According to the post, Chapsky’s declaration mentions that FTX’s international arm faced an $8 billion liquidity shortfall on Nov. 11, 2022. Despite this, the platform remained solvent because its assets exceeded customer deposits. He added his opinion on the given the nature and value of the assets in FTX’s possession on November 11.

The declaration further added that international customers could have been repaid within months, not years. If the exchange did not get into omnibus bankruptcy proceedings and abruptly shut down. Bankman-Fried said this view was validated by findings from the bankruptcy court’s independent examiner.

Earlier, SBF had claimed that fresh evidence shows that Biden’s DOJ threatened several witnesses into silence or led them to change their testimony. He asked for his conviction to be thrown out. He added that Judge Lewis Kaplan should recuse himself from this motion. 

He stated that companies were forced offshore under Biden, while under the Trump administration, they’re welcome back in America. He pointed out that under Democrats, companies that needed licenses were refused. Meanwhile, under the new administration, that has changed, and the DOJ is no longer indicting entire industries.

SBF bets on new evidence

SBF is serving a 25-year prison sentence for fraud tied to FTX’s collapse, and now he is bidding for a new trial. In this case, he even filed a motion in Manhattan federal court Pro Se. This suggests that he is representing himself. The request for a new trial was filed by his mother, Barbara Fried. She had argued that new witness testimony could undermine the prosecution’s case.

The filing highlighted the absence of testimony from former FTX executive Ryan Salame. He fought his own legal battle and was later convicted on federal charges. Salame had claimed he reached an agreement to cooperate with prosecutors that would shield his wife. But she was later charged with allegedly taking illegal campaign contributions in her congressional campaign.

SBF’s new bid argues that new evidence and witness accounts could challenge the narrative presented at trial. However, appellate judges have previously shown skepticism about that line of argument. The November hearing saw members of the appeals panel question whether solvency was central to the case.

FTX’s fallen token FTT posted some gains amid the fresh claims. FTT price is up by more than 13% in the last 7 days, but it is still down by 99% from its all time high of $85 recorded on September 9 2021. FTT is trading at an average price of $0.373 at the press time.

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