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FTX CEO John Ray Says Sam Bankman-Fried Victims “Suffered and Continue to Suffer”

Last Updated March 21, 2024 11:33 AM
Eddie Mitchell
Last Updated March 21, 2024 11:33 AM
By Eddie Mitchell
Verified by Peter Henn

, Key Takeaways

  • FTX CEO John Ray has categorically rebuked Sam Bankman-Fried’s lawyers claims.
  • When Ray took over FTX, the exchange only had 105 Bitcoin left.
  • Bankman-Fried’s lawyers seek to reduce his sentence to six and a half years.

FTX restructuring officer and CEO, John Ray III, has blasted attempts by Sam Bankman-Fried’s lawyers to reduce the disgraced former billionaire’s prison sentence.

In an impact statement, Ray refuted Bankman-Fried’s claim that there was “zero” harm to customers after the collapse of FTX.

Ray’s March 20 letter comes following a proposed sentencing memorandum that could see Bankman-Fried jailed for 40 to 50 years.

FTX CEO Slams SBF Lawyers

Writing to Judge Lewis Kaplan in a victim impact report on behalf of FTX and its many creditor victims, the man leading restructuring efforts sought to address some inaccuracies in Bankman-Fried’s sentencing plea. Ray also took his lawyers to task for downplaying  the impact this has had on the victims.

Firstly, Ray refuted claims from lawyers in February 2024  that the FTX collapse caused “no harm to customers, lenders, and investors is zero” because “the money was there-not lost”. He also criticized claims that FTX was solvent when it filed for Chapter 11 bankruptcy. Describing his effort to steward a “metaphorical dumpster fire”, he said:

“I can assure the Court that each of these statements is categorically, callously, and demonstrably false.”

This follows a March 19, 2024 response  to the government’s sentencing memorandum proposal. There, Bankman-Fried’s lawyers highlighted the ongoing portrayals of their client as a “depraved super-villain” and the “medieval view of punishment” which would essentially be a death sentence recommendation.

They argued that this was “not justice,” and went on to reaffirm that “the truth is, there were never any losses”. According to the lawyers, money was always available, assets are intact, and each victim will receive “100 cents on the dollar – – plus interest.”

In his response , Ray was quick to note the money they “hope to return” wouldn’t exist without the “tens of thousands of hours” of work legal teams dedicated to unearthing missing funds. He said that they had been working meticulously to uncover every “dollar, token, or other asset” spent on luxury living.

105 Bitcoins Left

Ray remains hopeful FTX can return value back to victims. However, he highlighted that, even in the receipt of a return, the damage was done. He said:

“Even taking into account the potential for achieving anticipated recovery levels, which is by no means assured, 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.””

According to Ray, FTX will never recover to the same economic position thanks to its founder’s “colossal fraud”.  Later in the letter , Ray also noted that, when he stepped in as CEO, FTX only had 105 Bitcoin. This was a long way from the outstanding customer entitlements of 100,000 BTC.

Although Bankman-Fried’s lawyers argue that the money was always there, Ray’s testimony to the contrary is damning. It also says that a jury concluded that these funds were pilfered away, and that Bankman-Fried “stole them”.

In conclusion, Ray warned false narratives created to enhance Bankman-Fried’s public image came at the expense of victims and those working on the case.

“Make no mistake; customers, non-governmental creditors, governmental creditors, and non-insider stockholders have suffered and continue to suffer.”

Guilty on all Accounts

A court found Bankman-Fried guilty of all seven charges against him after a criminal trial in New York in 2023.

This included two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy, and one count of money laundering conspiracy. This stack of charges could, therefore, see Bankman-Fried behind bars for 115 years.

Despite guidelines suggesting a sentence of 40 to 50 years, Bankman-Fried’s lawyers still want it reduced to six-and-a-half years.

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