Sam Bankman-Fried, the former chief executive of collapsed crypto exchange FTX, claimed the company he founded was still solvent, even as his new boss, who oversaw Enron’s final days, begins the formal bankruptcy process.
In a series of tweets posted overnight Tuesday, Bankman-Fried insisted the company had around $9bn (£7.6bn) in assets, in a mix of holdings semi-liquid and illiquid, while owing only $8 billion to its customers.
The tweets implicitly double down on his first claim that his company’s “serum” holdings, an FTX-controlled token with a current market cap of $80 million, are actually worth $2 billion.
“A few weeks ago, FTX was processing around $10 billion a day in volume and billions in transfers,” he wrote. “Here’s where things are today, roughly speaking,” he said, before saying the company had $5.5 billion in “semi” liquid assets and $3.5 billion in dollars of “illiquid” assets. “And yes, maybe that illiquid $9 billion [at market prices] not worth $9 billion. [On the other hand] – a month ago, it was worth $18 billion.
Bankman-Fried acknowledged “you’ve all seen this”, since the numbers he cited had already been revealed in an internal spreadsheet published by the Financial Times on Saturday, apparently created by Bankman-Fried himself on Thursday, November 10, the same day he apologized for his huge collapse in value earlier in the week.
However, that spreadsheet also suggested that some of the “less liquid” $5.5 billion might prove difficult to turn into cash for the company’s creditors. More than $2 billion of assets held by the company reside in a crypto token called Serum, the underlying token of a decentralized exchange launched by FTX in 2021.
Despite valuing his token holdings at $2.2 billion and claiming they were worth over $5 billion a few weeks earlier, the total implied market capitalization of all freely traded Sera is only $80 million. of dollars. It would be difficult for FTX or its creditors to sell 25 times more serum than ever before, at a price close to the current market price, if at all.
The market value of the serum is also closely tied to the fortunes of FTX. Although the serum exchange is “decentralized”, it is in practice controlled by FTX, which owns the vast majority of governance tokens and the right to mint new ones – a right it has already exercised twice in the past.
Despite being ousted as chief executive, Bankman-Fried continues to try to raise capital for a stock market bailout. “What can I try to do?” Increase liquidity, make customers whole and restart. I may fail. Maybe I won’t get anything more for customers than what already exists,” he said.
“I have certainly failed before. You all know that now, too well. But all I can do is try. I’ve failed enough for the month. And part of me thinks I could get somewhere.