Sam Bankman-Fried’s Written Testimony Notes Dec 12, 2022, is part of
This is part 10 of 11.
Feature Image: HackerNoon’s Stable Diffusion AI, Prompt “my land not your land”
There have been a number of statements made over the course of this process which I believe are inaccurate or substantially misleading. Below is a partial list of them.
Numerous assertions, by the Chapter 11 process and team, that John Ray is CEO of FTX International. John Ray is not CEO of the primary operating entity of FTX International.
Numerous assertions, by the Chapter 11 process and team, that there was unauthorized access of customer funds by The Bahamas.
I believe that the current Chapter 11 team has significantly overstepped its mandate.
Numerous entities were improperly placed in Chapter 11 proceedings by the Chapter 11 team, either because:
This includes entities that I believe own the vast majority of customer accounts of FTX International, and oversee the vast majority of customer assets.
I believe that the assets, properties, credentials, passwords, cryptographic keys, domain names, and governance of FTX International should rest with the CEO, Board of Directors, and/or locally regulatorily appointed administrators of the core entity or entities that primarily operated FTX International.
I believe that much of the current Chapter 11 team–including Alvarez and Marsal among others–is putting in a heroic effort to manage a difficult global business on very little notice, but that the initial and current leadership and direction they have gotten has been counterproductive. I further think that the leadership does not have legal authority to lead the global restructuring and financing effort, as they are not the current CEO, Board of Directors, or locally regulatorily appointed administrators of the core entity that primarily operated FTX International. As such, I believe they are acting outside of their mandate, defying law in multiple jurisdictions, and misappropriating funds that are the property of the primary entity of FTX International. I think that the Chapter 11 team would be extremely useful and better served working constructively with the legally and regulatorily valid global leadership of the operating entities of FTX International.
In one Chapter 11 filing, John Ray stated that “the dilutive ‘minting’ of approximately $300 million in FTT tokens by an unauthorized source after the Petition Date”. There was no such minting, as block explorers would confirm. This statement is bizarre, confrontational, false, and harms the reputation of people including myself.
In one Chapter 11 filing, John Ray included a graph regarding FTX customers by jurisdiction, claiming that over 20% of users were from the Cayman Islands. In fact, according to data from October 20th, 2022, less than 1% of trading accounts on FTX were from the Cayman Islands.
There have been various statements made by John Ray in filings about his own team’s inability to produce data, including “a complete list of who worked for the FTX Group”; “daily reconciliation of positions on the blockchain”; “a list of their top 50 creditors that includes customers”.
John Ray complained about “The failure of the co-founders and potentially others to identify additional wallets believed to contain Debtor assets”
I believe that United States regulators may have been told materially misleading information about FTX US, including claims that FTX US is not solvent. I believe that it is solvent.
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