John J. Ray III, the current CEO of the crypto exchange FTX, opposes the founder Sam "SBF" Bankman-Fried's assertions regarding the crypto exchange's 2022 downfall.
In a detailed victim impact statement submitted to the New York District Court, Ray provides a stark counter-narrative to SBF's earlier optimistic portrayal of the situation.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
5 Best Crypto Portfolio Diversification Strategies (Animated Explanation)
In a plea to reduce his prison sentence, Bankman-Fried claimed that the actual "harm to customers, lenders, and investors is zero," as they will be repaid in full.
Ray argues that even in the best outcome, creditors and non-insider investors will not fully recoup their losses as if the fraud had not happened.
That is because claims are valued as of the bankruptcy filing date, meaning someone with Bitcoin (BTC) on FTX as of November 2022 will be paid based on its value then, nearly four times lower than today's.
He further added that repayments based on today's values would not have been possible, as upon his takeover, FTX was left with only 105 Bitcoins "against customer entitlements of nearly 100,000 Bitcoins."
Ray makes it clear that the eventual ability to compensate customers does not absolve SBF of criminal responsibility. He states:
The value we hope to return to creditors would not exist without the tens of thousands of hours that dedicated professionals have spent digging through the rubble of Mr. Bankman-Fried’s sprawling criminal enterprise to unearth every possible dollar, token or other asset.
Ray firmly positions the FTX debacle within the broader financial integrity and accountability discourse. He stresses that the fundamental harms and ethical breaches cannot be overlooked despite the optimistic outlook on asset recovery.
Sam Bankman-Fried's sentencing is set for March 28. As the day approaches, the unfolding FTX saga is a cautionary tale for the crypto industry, underscoring the need for transparency, ethical conduct, and rigorous oversight.
