FTX-SBF: As Legal Fees Stack High, SBF Turns to Substack

“I didn’t realise it would ask for contributions”, Sam Bankman-Fried responded as a Twitter user (@Compound248) pointed out the paywall to the embattled FTX founder’s newly opened Substack. Over the past few weeks, Sam has taken time to reiterate his innocence, pointing accusing fingers at rival Binance CEO Changpeng Zhao for the fall of FTX and claiming his company would have survived if it was allowed to live a few weeks longer.

“I am not aware” was another famous response to many questions prodded at the Bahamas-based founder as regards fraudulent operations between FTX and its money laundering sister arm, Alameda. Caroline Ellis, the now-defunct manager of Alameda who turned on Sam by pleading guilty, had disclosed to the government that Sam had knowledge of and in most cases, was in control of the multiple decisions to syphon user’s deposit. Sam and co-founder Gary Wang together owned Alameda.

Now broke and under house arrest with a pile of legal fees stacking higher than the empire state, poor Sam has turned to Substack to journal his own side of the story—or another swathe of implicative evidence. His lawyers are fighting hard to reclaim Sam’s $450 million Robinhood shares, which currently remain under government forfeiture, citing the need for their client to foot his legal defence as a necessary right.

In what looks like an interesting tell-all narrative on Substack, Sam declared to offer his total Robinhood shares towards settling aggrieved customers in turn for recognition of his directors and officers (D&O) liability insurance. The ex-Forbes billionaire goes on to declare that FTX had approximately “$350 million in cash in excess of customer funds” when filing for chapter 11 bankruptcy. He further explained that potential funding offers to the tune of $4 billion were already in the pipes and could have injected more health into the ailing exchange, providing enough financial covering for customers—had it been allowed to stay a little longer.

What seemed puzzling to readers is that Alameda magically wiped off 80% of its $100 billion valuation in less than 48 months, per Sam’s calculations.

Sam has hired five lawyers and a spokesperson for the legal tussle ahead. Chief among them is Ira Sorkin, who represented the late Bernie Madoff—a popular American Ponzi conman who fleeced nearly $68 billion victims—in 2009. The number is oddly well-justified for a case of bankruptcy in two countries, multiple civil lawsuits from private and government institutions and a potential jail time in multiple decades. 

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