Bankman-Fried’s Defense: “FTX Was Never Insolvent”
Sam Bankman-Fried, the embattled founder of cryptocurrency exchange FTX, has resurfaced with a bold claim that the company “was never insolvent” when it declared bankruptcy in November 2022. In a document shared on his X account, Bankman-Fried argues that FTX’s financial position was sound at the time lawyers decided to place it into bankruptcy.
According to his statement, FTX’s balance sheet showed approximately $15 billion in assets against $8.4 billion in liabilities. He suggests this reflected a solvent company, not one on the brink of collapse. Bankman-Fried contends that the bankruptcy was triggered by panic from lawyers and regulators, who allegedly rushed to liquidate assets rather than allowing the firm to stabilize.
Contradictions in the Public Record
Despite Bankman-Fried’s assertions, official filings and subsequent investigations tell a starkly different story. When FTX filed for Chapter 11 bankruptcy on November 11, 2022, it listed over 130 related entities and cited uncertainty about its true asset and liability valuations. The court-appointed restructuring chief later remarked that he had “never in my career seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.”
Independent audits and investigations revealed widespread mismanagement, blurred boundaries between FTX and its sister firm Alameda Research, and missing customer funds. Critics argue that regardless of how assets were valued, the exchange faced a liquidity crisis after a surge in withdrawal requests exposed its inability to meet obligations—effectively forcing the bankruptcy.
Legal Fallout and Ongoing Controversy
Bankman-Fried maintains that he was sidelined by legal counsel and that the bankruptcy filing was premature. His defense team continues to argue that FTX’s downfall stemmed from poor crisis handling rather than insolvency. However, court findings and testimony from the company’s new leadership contradict that narrative, painting a picture of systemic governance failures.
If his claim were accurate, it could raise major questions about the decision-making of FTX’s leadership and advisors—particularly whether the bankruptcy and subsequent losses could have been avoided. Yet, given the fraud findings and conflicting valuations, his statement is likely to remain a divisive topic in the ongoing saga of FTX’s collapse. Future appeal and creditor proceedings may reveal whether the downfall was truly a result of insolvency or simply mismanagement under pressure.
