Sam Bankman-Fried Asserts FTX Was ‘Never Insolvent’ – Insights from His Perspective

FTX

In a recent declaration, Sam Bankman-Fried maintains that FTX consistently possessed adequate assets to settle obligations to its customers, suggesting the platform encountered a liquidity crisis instead of a genuine insolvency issue. His claims are based on the current recoveries tied to FTX's bankruptcy.

Key Takeaways

Bankman-Fried insists FTX was never insolvent and had sufficient assets to repay customers.
He argues that the approximately $8 billion owed to customers at the time of FTX’s bankruptcy is still effectively intact.
The narrative put forth portrays the FTX collapse as a severe bank run with panic withdrawals, leading to lucrative asset sales that were poorly timed.
Despite the circumstances surrounding the bankruptcy, creditors have seen partial recoveries of their investments.
This case sets a new standard for cryptocurrency failures and potential customer recovery.

Overview of Claims Made by Bankman-Fried

In a document dated September 30, 2025, Bankman-Fried and his team argue that the $8 billion owed to clients during FTX's bankruptcy in November 2022 “never left.” According to him, customers are expected to recover between 119% and 143% of their original claims, with around 98% already compensated. Even after addressing the claims and legal fees amounting to $1 billion, FTX’s estate reportedly retains about $8 billion in assets. Bankman-Fried emphasizes, "In fact, FTX was never insolvent."

“There have always been enough assets available to fully repay all customers, both in November 2022 and today,” Bankman-Fried stated.

The FTX Collapse: A Bank Run Scenario

Bankman-Fried characterizes the collapse of FTX as a classic example of a bank run. Withdrawals soared to billions within a few days as the company sought financing and asset sales, while still generating trading fees. According to him, plans to bridge the financial gap were underway by late November 2022, and customer withdrawals had started to resume.

His narrative contrasts sharply with the early assertions made by the bankruptcy team regarding public shortfalls. He claims that FTX and Alameda's assets surpassed their liabilities throughout 2021 and up to mid-2022, and states that the estate's own documents from January 2023 indicated that assets were approximately equal to or greater than the customer claims at the time of filing.

Assets That Appreciated Post-FTX Liquidation

Bankman-Fried’s team highlights that some asset sales occurred at inopportune times. They mention several holdings—like Solana, Sui, and Anthropic—stating these positions would have been valued much higher had they been retained during the market recovery. They argue that insider trading practices and excessive professional fees diminished the estate’s assets.

Moreover, they express concern about the payouts being dollarized. Creditors are obtaining the USD values of their cryptocurrency based on November 11, 2022, rather than receiving the actual crypto assets. This method, according to the paper, prevents customers from benefiting from the significant market recovery that occurred afterward, emphasizing that the lengthy wait exacerbated the difference between the prices at the filing date and the current levels.

FTX: Once a $30 Billion Giant

For context, FTX was valued at over $30 billion and boasted more than a million users before its downfall, which was triggered by concerns over the intertwined risks between FTX and Alameda, resulting in a surge of withdrawals and a failed rescue attempt.

Following a trial in 2023, Bankman-Fried was convicted of seven offenses and received a 25-year sentence in March 2024, along with an $11 billion forfeiture—an outcome he is currently appealing.

The estate asserts that it maximized recovery efforts, citing asset monetization and successful litigation that contributed to rising payout estimates. Creditors, particularly those with smaller accounts, seem more focused on cash recovery speed and certainty, often at the cost of potential crypto profits.

Implications for the Crypto Market

The near-total recovery of customer funds based on pre-bankruptcy values represents a rare scenario in major exchange collapses for cryptocurrency. The ongoing discussion about whether repayments should have been made in cryptocurrency instead of fiat dollars, as well as concerns over the timing of asset sales, will provide vital lessons for unwinding a trading platform in a volatile bull market.

In summary, Bankman-Fried's assertions aim to revise the narrative surrounding the FTX collapse. He states, “The answer is they never left,” referring to customer funds, concluding that FTX could have compensated everyone in 2022 if management had not been shifted to external legal counsel and the court system.

The validity of these claims will ultimately be determined by the courts, but the scale of recoveries has already influenced the understanding of insolvency amid cryptocurrency failures.