Sam Bankman-Fried’s latest defense is utterly unconvincing

Sam Bankman-Fried is still desperate to convince the world that he didn’t defraud customers of his bankrupt cryptocurrency exchange, FTX. The disgraced mogul, out on bail as he awaits a federal trial later this year, launched a new Substack on Thursday to make his case.

“I didn’t steal funds, and I certainly didn’t stash billions away,” Bankman-Fried wrote in the newsletter’s first post.

Following from there is a long, rambling explanation of how Alameda Research, SBF’s crypto-trading firm, went bust in the fall of 2022. FTX failed because it had loaned billions of dollars to Alameda, which Alameda proceeded to lose through risky trading.

SBF claims that the value of Alameda’s cryptocurrency holdings fell from more than $100 billion in late 2021 to around $11 billion just before it went bankrupt. And he says that by the end, most of the money was tied up in illiquid or “less liquid” assets that couldn’t easily be converted to cash.

Over the same period, FTX’s loans to Alameda increased from roughly $3 billion to $10 billion. So when panicked customers started trying to pull their money out of FTX in early November, FTX couldn’t get customer funds back from Alameda.

I have no idea if the figures in SBF’s Substack post are accurate; SBF himself labels them as “JUST AN ESTIMATE.” But even assuming everything in the post is true, it isn’t much of a defense.

SBF stands accused of taking money from FTX customers, giving it to Alameda, and letting Alameda lose it. Going into excruciating detail about exactly when and how Alameda lost the money doesn’t really refute claims that Alameda shouldn’t have had the money in the first place.

The former CEO has been offering unconvincing defenses of his actions ever since FTX declared bankruptcy two months ago. Late last year, SBF did a series of high-profile media interviews, including with the New York Times and ABC’s Good Morning America, trying to explain what happened. When I first saw these interviews, I wondered if there might be something to his story, because he really did seem to be trying to answer the reporters’ questions honestly.

But the more I’ve seen SBF try to make his case, the less sympathetic I’ve gotten. Because the fundamental question is pretty simple: Did he allow Alameda to borrow billions of dollars from FTX without customer consent? At this point, almost everyone ...