6 excerpts from the proposed SBF certification protocol


Bahamian authorities arrested FTX founder Sam Bankman-Fried on Monday night, just hours before he was scheduled to testify before the US  Financial Services Committee. 
 Bankman-Fried is charged in the United States with, among other things, bank fraud, conspiracy, securities fraud  and money laundering. 

 In Bankman-Fried's absence, FTX CEO John Ray, who previously led restructuring efforts at companies such as Enron, testified. He called the FTX collapse and related fraud "worse than Enron." 

 Ray added that FTX's restructuring team has so far secured more than $1 billion worth of assets  and  it could take  months to recover. 
 Although the founder of FTX did not testify, Forbes obtained copies of Bankman-Fried's proposed affidavits. Blockworks has compiled key takeaways from the prepared remarks. 

 Regrets Bankruptcy  

 Bankman-Fried was prepared to say he deeply regrets signing the papers that sent FTX into Chapter 11 bankruptcy just days after he called the exchange "potentially insolvent." 
 When bankruptcy was declared on November 11, Ray became the new CEO of FTX. About a week after taking over FTX, Ray said he had never seen "such a complete failure of corporate control and such a complete lack of reliable financial information." 

 Bankman-Fried's prepared remarks state that she sent five emails to Ray and that Ray  never responded. In one email, the former FTX CEO said he wanted to share information with Ray about possible future options and financing for FTX and its creditors.  Lawyers representing 
 FTX and its affiliates said in a bankruptcy filing last month that up to a million creditors could be named in the lawsuit. 
 customers can be filled 
 Bankman-Fried had to admit that it is still aware of "serious financing offers" worth billions of dollars that could completely make FTX customers. 

 "But I believe  all of this depends on the relaunch of FTX  as an exchange," the proposed minutes said. "I sincerely hope that all  global teams working on FTX will seriously consider such an opportunity, as I believe it will bring a lot of added value to customers and creditors." 

 Bankman-Fried wanted to add that it believes FTX US was and remains solvent and "will be able to pay  all  customers in full tomorrow." But he adds that the Chapter 11 team has frozen FTX's US exchange and prevented customers from accessing their account information and funds. 

 Alameda Financials 

 Bankman-Fried believes that Alameda Research, the crypto trading firm he founded in 2017, would have a net worth of well over $50 billion in market capitalization by the end of 2021. At the time, he held about 90% of his position in equity and the remaining 10% in loans. 

 During the three-day period last month when Bankman-Fried was scheduled to testify, she estimates that the market value of Alameda Research's assets fell by more than 50%, leaving the company with about $11 billion in assets and $11 billion  liabilities. About $3 billion of these assets were highly liquid, leaving  liquidity  of about $8 billion. 
 Avoiding responsibility... sort of 
 The opening text is: "To begin with, I would like to officially declare under oath: I messed up." 

 However, Bankman-Fried meant to mention Binance CEO Changpeng Zhao's tweet on November 6, which said the rival exchange plans to sell its stake in FTT, which was labeled as FTX. 

 "The tweet followed what I believe was a month of constant negative PR on FTX, mostly driven by Binance," the text reads. "Alameda's hedges failed in November 2022 because the collapse was specifically caused by its hedges launched by the same [Zhao] PR campaign." 
 A spokesperson for Binance  did not immediately respond to a request for comment. 
 Bankman-Fried had to say that he started FTX  routinely working 18-hour days, but worked about 30% less than that for much of the year. 

 "Thought I could keep FTX together despite the expansion," the text says. "I was wrong. I bit off more than I could chew and ended up not focusing on risk management. Binance's potential purchase of FTX 
 probably never took off 
 Binance expressed its intention to buy FTX on November 8th, but backed off about a day later. 

 Bankman-Fried had to admit, "As far as I understand, Binance never intended to execute the transaction." The former CEO of 
  was prohibited from responding to other potential investors due to a pre-contract signed with Binance 

 “There is much more to say about Binance, its role in the cryptocurrency ecosystem, and its relationship with FTX, but this is not the right one. place or time." 

 Addressing other allegations against him 
 While SBF was prepared to say that he "showed poor risk management error as CEO of FTX", he went on to address allegations that he tried to manipulate Tether after the November crash. 

 He  also had to deny allegations that he took steps to trigger the collapse of Three Arrows Capital earlier this year or that he is secretly hiding billions of dollars. Instead, he said he had a bank account with about $100,000. 

 "I'm not sure I'll be able to pay all  the legal fees I'm likely to incur," the scheduled minutes state. "And I'm not sure what to do about it."

Source : https://blockworks.co/news/sam-bankman-fried-planned-testimony

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