Bitcoin has soared 400% since FTX collapsed. Here’s why creditors are still unhappy

Bitcoin has soared 400% since FTX collapsed. Here’s why creditors are still unhappy
FTX Group Chief Executive Officer John J. Ray III has things to say about SBF. Credit: Shutterstock
  • FTX CEO John Ray told Sam Bankman-Fried’s sentencing judge the disgraced wunderkind is misleading creditors.
  • 'Bankman-Fried continues to live a life of delusion,' Ray says.
  • Bitcoin has soared 400% since the collapse of FTX.

John J. Ray III, who is managing the bankrupt crypto exchange FTX, had more choice words for its disgraced founder, Sam Bankman-Fried

Creditors are expected to get some of their cash back if seized funds are returned and litigation with the CFTC, IRS, and SEC end in favourable settlements for the estate.

Yet Ray said in a letter to the US bankruptcy judge that “customers still will never be in the same position they would have been had they not crossed paths with Mr. Bankman-Fried and his so-called brand of ‘altruism.’”

“The harm was vast. The remorse is nonexistent,” he said. “Effective altruism, at least as lived by Samuel Bankman-Fried, was a lie.”

He added that the value of users’ claims were set at the time of the firm’s bankruptcy — November 2022 — and not their potential value today.

Bitcoin, for instance, has risen 400% since the fall of FTX, but that doesn’t mean creditors will enjoy those gains, said Ray.

Still, even those back-dated claims are “incorrect.”

“The FTX debtors did not possess the crypto that customers assumed was held in their accounts as of the Petition Date,” he said.

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“Due to ‘back door’ borrowing (theft) by Alameda at Mr. Bankman-Fried’s direction, those account statements were incorrect.”

Bankman-Fried sentencing

Ray wrote the letter to address what he called “material misstatements and omissions” in Bankman-Fried’s sentencing submission.

He said claims that the exchange was solvent at the time of its bankruptcy, that funds had not been lost, and that customers, investors, and lenders suffered no harm were “categorically, callously, and demonstrably false.”

The eight-page document is just the latest in the ongoing cleanup following the collapse of the FTX crypto exchange.

The exchange imploded in November 2022 amid a surge of withdrawal requests that revealed a massive $10 billion hole in the firm’s balance sheet.

A year later, Bankman-Fried was found guilty of seven counts of fraud and conspiracy.

Prosecutors are demanding that Bankman-Fried serve up to 50 years in prison. His sentencing is scheduled for next week.

“As I understand the criminal sentencing guidelines, the larger the loss, the longer the potential sentence,” Ray said.

Crypto market movers

  • Bitcoin dropped 5% to trade just over $64,000. It’s down nearly 6% on the week.
  • Ethereum is down 4% overnight and trades at $3,300.
  • Solana’s SOL token is the top-10′s biggest loser, with the buzzy layer-1 token plummeting 9% in the last 24 hours.

What we’re reading

Liam Kelly is DL News’ Berlin correspondent. Contact him at

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