According to The Block, FTX CEO John J. Ray III has questioned former CEO Sam Bankman-Fried’s recent argument that the platform incurred “zero” losses for customers in the catastrophic collapse in 2022, calling such claims “reckless” and “incorrect”.
In a document filed earlier on Tuesday, SBF’s defense team opposed the prosecutor’s request for a 40 to 50-year prison sentence, arguing that FTX’s collapse “never caused any losses” because creditors’ claims will be fully compensated in the bankruptcy process. SBF’s lawyers had previously requested a prison term of 63 to 78 months.
Ray also added that the extent of asset recovery is the result of hard work by professionals, not SBF’s merit.
Assets unlikely to be fully recovered
Ray also argued that SBF’s claim of full compensation for the loss value overlooks key factors, including that victims holding Bitcoin at the time of FTX’s collapse would receive a recovery value of more than 400% lower than current rates, as the user’s claim amount is calculated based on the asset price on the day of the bankruptcy protection application (November 11, 2022). The FTX CEO further added that even so, due to Alameda Research’s “backdoor” borrowing, the clients’ account balances are likely to be “inaccurate”.
Ray stated:
“When I took over FTX, the company only had 105 Bitcoin left, while owing customers nearly 100,000 Bitcoin. He further added that these lost Bitcoin assets were likely used by SBF for personal gain. Ray also mentioned the jury’s conclusion.
Last year, a New York jury found SBF guilty of defrauding investors of FTX and Alameda Research in what the prosecutor called “one of the largest financial fraud cases in U.S. history”. SBF’s sentencing hearing is expected to take place on March 28.
Related reports: “Prosecutors request judge to sentence to 50 years in prison, SBF’s lawyer argues: This is not justice!” and “Bloomberg: Oaktree Capital and other companies hold FTX debt, Attestor becomes the largest buyer with a total debt of $394 million.”
