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FTX Collapse: Document Blames Lawyers, Not Fraud
A newly surfaced 14-page document has reignited debate over the collapse of crypto exchange FTX, arguing that the company was never truly insolvent and that its downfall stemmed from mismanagement and panic, not fraud.
Report Challenges Fraud Narrative
The document echoes several claims made by former FTX CEO Sam Bankman-Fried during his trial and a later jailhouse interview. It asserts that in 2022, FTX suffered only a temporary liquidity crunch that could have been resolved within weeks.
Instead, according to the authors, FTX’s external legal advisors “seized control” and forced the company into bankruptcy unnecessarily.
The report boldly declares:
“FTX was never bankrupt.”
This statement directly contradicts the findings of a Manhattan jury in 2023, which convicted Bankman-Fried of defrauding investors and misusing $10 billion in customer funds.
Claims of Financial Strength Before Collapse
The document paints a very different picture of FTX’s financial health before its downfall. It claims the company held $25 billion in assets and $16 billion in equity value against $13 billion in liabilities, suggesting that the exchange was solvent at the time of its bankruptcy filing.
It further contends that if FTX and its trading arm, Alameda Research, had continued operating, their combined portfolio could be worth $136 billion today.
Portfolio of Alleged High-Value Investments
The report lists a range of high-profile assets that allegedly supported FTX’s valuation, including a significant stake in Anthropic, the artificial intelligence firm now valued at $14.3 billion.
Other holdings mentioned include:
- Shares in Robinhood, reportedly worth $7.6 billion
- Investments in Ripple and Genesis Digital Assets, a Bitcoin mining company
Ironically, just last month the FTX Recovery Trust sued Genesis Digital Assets, seeking $1.15 billion it claims was misused under Bankman-Fried’s direction.
Controversy Over FTT Token Value
A particularly contentious part of the document is its claim that FTX’s native FTT token would now be worth nearly $22 billion had the company survived.
Prosecutors in Bankman-Fried’s trial rejected this notion, asserting that FTT was used to inflate Alameda Research’s balance sheet and conceal major financial shortfalls.
Political Speculation and Legal Fallout
Adding to the controversy, conservative commentator Laura Loomer recently alleged that a campaign is underway to urge former President Donald Trump to pardon Sam Bankman-Fried.
The claim follows unverified reports that Trump had pardoned Binance founder Changpeng Zhao after the exchange admitted to violating anti-money laundering laws—a claim that has not been confirmed by official sources.
Bankman-Fried is currently serving a 25-year federal prison sentence, handed down in 2024 by U.S. District Judge Lewis Kaplan, who remarked during sentencing:
“A thief who bets stolen money successfully still does not deserve leniency.”
Ongoing Debate Over FTX’s Legacy
The resurfacing of Bankman-Fried’s former online account and this new document have once again ignited public debate over what really caused FTX’s collapse.
While critics view the report as a revisionist attempt to reshape history, supporters say it raises legitimate questions about how legal and management failures contributed to the crypto giant’s downfall.
