SBF's Latest Prison Interview: FTX Never Went Bankrupt, Just a Liquidity Crisis

Original Title: Sam Bankman-Fried Speaks To The New York Sun From Prison

Original Source: YouTube

Original Translation: Bitpush News

Interview Background:

· Interviewer: Ari Hoffman, Deputy Editor of The New York Sun.

· Interviewee: Sam Bankman-Fried (SBF), Founder of FTX, sentenced to 25 years in prison for charges including fraud.

· Interview Date: February 18, 2025, conducted in three parts, each 15 minutes, with an hour break in between.

· Interview Location: Manhattan Detention Center.

Sam Bankman-Fried elaborated in the interview on his views regarding FTX's bankruptcy, legal battles, the U.S. political situation, and the future of the cryptocurrency industry. He strongly asserted that FTX never went bankrupt but faced a liquidity crisis. He criticized the FTX bankruptcy trustee and the U.S. justice system's unfairness, claiming his case to be a "sacrificial lamb" in a political struggle. He expressed hopes for a potential pardon from President Trump and cautious optimism for the future. He also shared personal insights, such as the experience of falling from being one of the richest individuals in the world to rock bottom.

Below is a summarized transcript of the interview for easy reading, with a moderate restructuring of the dialogue from the interview video.

AH: Hi, Sam, it's Ari here. Pleasure to talk with you. Our time is limited, so I'd like to dive right into the topics. I know you have some thoughts on the current political environment, especially regarding the pardon issue. Additionally, your prosecutor Danielle Sassoon has recently been in the spotlight. Why don't we start with your thoughts?

SBF: Of course, a lot has happened recently. As you mentioned, my prosecutor Danielle Sassoon recently made headlines due to a dispute with the Trump Justice Department. My former judge Kaplan was also a New York judge appointed by Trump, which ties into a broader political struggle between the incoming Trump Justice Department and what they perceive as the Biden Justice Department.

President Trump's view of the Department of Justice, along with some in his camp's distrust of the justice system, has made this situation even more complex. They believe that over the past few decades, the Department of Justice has become increasingly politicized, especially recently.

AH: Do you think your case is related to this political struggle?

SBF: This is indeed a part of it, of course, there are many other factors. High-profile trials often see such situations, where the careers of all involved officials are affected. I believe my case did not receive a fair and just trial, especially with some of the rulings in the court.

For example, the judge allowed the prosecution to tell the jury that "all investors' money was gone," but at the same time did not allow my defense team to counter this. The fact is, this was simply not true. This became a key point in the trial, and the story the jury heard was incorrect.

AH: What is your take on the Department of Justice, especially with the recent turmoil in the Southern District of New York (SDNY)? Do you think your case also involved prosecutorial misconduct?

SBF: I think there are some parallels. For instance, you can look at the sentencing of all the cooperating individuals. We have a Republican who only pleaded guilty to a small part of the charges, yet he was sentenced to 7 and a half years—a term that is four times longer than the other three individuals combined. Meanwhile, other cooperating individuals seem to have been treated more leniently, and the disparity in these sentences is very apparent.

Furthermore, the prosecutor also threatened his wife, saying that if he did not cooperate, they would bring a case against her when she was a Republican congressional candidate. This kind of behavior is highly politically charged.

AH: In the media, you are portrayed as a major Democratic donor, with donations to the Republican Party being merely symbolic. Do you think there is a misunderstanding of your political stance?

SBF: It's actually a two-way street. In 2020, I did indeed donate a substantial amount to the Biden camp, partly because I did not want the Democratic Party to become a party led by Bernie Sanders. However, by 2022, my political stance had shifted.

I spent a lot of time in Washington dealing with legislators, regulatory bodies, and the administration, especially on crypto policy. I am very disappointed with the Biden administration and the Democratic Party, especially on cryptocurrency regulation. Their policies are devastating for the entire industry. The Republicans, on the other hand, are relatively easier to work with.

So, during my time in Washington, I spent more time on the Republican side, trying to prevent the Democratic government from taking overly regulatory measures. The Biden administration is very destructive and challenging to work with. Frankly, the Republicans are more rational. I spent a lot of time in Washington, DC, doing my best to bridge the partisan divide and prevent the government from taking harsh actions against the industry.

AH: There has been a lot of discussion about the changing atmosphere around tech giants, such as Zuckerberg and Bezos. You should have had some interaction with them. Do you think if the trial hadn't happened to you, you would be on the inauguration stage? Or, let me ask in a different way, have you seen what's going on? Do you understand it? Or how do you view it?

SBF: I obviously can't speak for them, but I think they have seen some of the same things I have seen over the past four years. You see, Zuckerberg expressed some intentions that were originally a reasonable, constructive stance on government misinformation, which ultimately turned into more of just political censorship. I think they encountered some similar frustrations when working with the Biden administration, as many in the crypto industry have found, anything related to business and ultimately freedom of speech.

AH: Do you think your trial was used as a political tool?

SBF: I think to some extent it was. Many high-profile cases have had similar situations involving prosecutors' careers, media attention, and political influence. I do not believe it was a fair trial.

AH: What is your view on politicians issuing meme coins? Well, have you heard of the TRUMP coin? That was released before his inauguration.

SBF: I have heard of it, but I don't have much information about it because, you know, my sources of information are somewhat limited in prison. But I'm not surprised to see politicians starting to get involved in the digital space; you know, I expect that over time, we will see more and more mainstream areas getting involved, partially because, compared to traditional finance, it is a much more flexible medium.

This is why this industry is developing so rapidly, with so much innovation, there are many reasons, but one of them is that it's much easier to build things in it. Infrastructure upgrades, more openness.

AH: What is your view on the bankruptcy process? Do you think FTX really went bankrupt?

SBF: FTX has never been bankrupt. It was a liquidity crisis, not a solvency issue. We had enough assets at the time to repay all customer funds. However, due to the law firm's takeover and their handling of the situation, the process became extremely slow and even misled the public.

Customers could have originally received their funds back in November 2022. But it took the bankruptcy trustee two years to acknowledge that there were enough funds. They initially claimed only $10 billion in assets, and now it has been discovered that there are $150 billion in assets. This was a complete failure of management.

AH: What are your thoughts on FTX and Alameda Research's fund usage?

SBF: FTX is a leveraged trading platform where customers engage in margin trading. Alameda Research is FTX's primary market maker and plays a vital role in the market.

All asset flows can be found in the financial statements. We have clear records of assets and liabilities, and at any given time, our assets always exceed liabilities. The issue was that the liquidity crisis led to market panic, preventing funds from being liquidated quickly.

AH: Do you feel you were wrongfully convicted?

SBF: Absolutely. Clearly, looking back on past decisions, there are things I would have done differently. But the most important thing is that I should have resisted the Sullivan Cromwell law firm's takeover of FTX in November 2022. I should have continued to address the liquidity issues instead of letting them take over and completely mislead customers. But I didn't. You know, after that, it was a painful few years of waiting, not just for me but for millions of customers who were wrongly told there was no money left until recently receiving any payments.

This led to millions of customers having to wait two years to get their funds back when, in fact, their funds should have been safe from the beginning.

AH: I think for most people, you know, the amount of money you have and deal with is almost unimaginable. What is your relationship with money? I mean, there are many articles about your interest in effective altruism and various other things, but, you know, from one angle, what does it feel like to have so much money? And then suddenly lose it, what was that experience like?

SBF: I basically split it into two categories. One is my own livelihood, such as personal consumption. From this perspective, my life hasn't changed much. You know, I live off my salary, which is a substantial one, $200,000 a year, but not billions of dollars. I haven't changed my lifestyle that much, I really haven't had that much temptation, I never really understood the meaning of a yacht. That has never been something I was really interested in. Instead, what I think about is my impact on the world.

I basically view it through the lens of effective altruism, which is to say, I have a lot of money to donate, and I think about what I can do with it that would be most beneficial. Some of it goes towards, you know, healthcare around the world, people who, you know, are dying from diseases that shouldn't be killing anyone anymore, malaria being just one of them. Some of it goes towards animal welfare, some towards pandemic prevention efforts, and various other causes.

Of course, some of it also goes towards politics. This is something I think about on a much larger scale, because frankly, you know, there are billions of people in the world, you know, there are millions of people dying each year from neglected tropical diseases, this is an area where you can really think on a very grand scale, in terms of funding, a billion dollars can actually be meaningfully deployed.

AH: If you were to achieve freedom, what are your plans?

SBF: You know, money is not the most important thing, I don't long for money, freedom is. Currently, I am still awaiting the outcome of the appeal. If successful, I will re-engage in meaningful work, particularly in the technology and finance sectors.

AH: If you find yourself free again, in whatever way, I mean, do you have any ideas, what might you do? Are you thinking of returning to the cryptocurrency field?

SBF: Obviously, that's very far off, I will seriously consider what I want to do in the future, even if at that time, but I try not to think too much about it right now because I am powerless.

AH: What do you miss most in prison?

SBF: Freedom. What I miss most is the ability to access information and make decisions at any time. I have always been striving to build something new, and now, I can only passively wait.

AH: What are your plans next? Well, to put it right out there, do you have any plans for the next few weeks, months? Does it all feel the same, or do you feel there is a narrative arc?

SBF: You know, the days go by pretty mundanely, well, there's not much to do in prison. You know, I'm used to working hard, and there's not much to do here. But, from a high-level perspective, one thing is definitely looming ahead, and that is the resolution of my appeal. Well, we have oral arguments coming up, you know, in the next, you know, maybe three to six months. Well, you know, I'm cautiously optimistic, but the odds are always stacked against anyone working within the federal criminal justice system.

So, cautious optimism just means that I believe there's a chance and hope that the judges will be open-minded, look at what has transpired carefully and critically. Besides that, a prisoner doesn't really have control over their life, so much of what happens to me is happening to me, not by my choice.

AH: Thank you, Sam. I hope you receive a fair outcome soon.

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