Crypto: Sam Bankman-Fried bitterly regrets having passed the relay to John Ray

Three years after the FTX debacle, Sam Bankman-Fried again breaks the silence from his cell. The ex-deposed ex-millionaire, convicted of massive fraud, delivers an unexpected admission. His biggest error, according to him, was not the hazardous management of the funds … but to have entrusted the reins of FTX to John Ray III, just before bankruptcy. A choice which he considers today as the point of no return in the collapse of his crypto empire.

Fatal transfer: a late admission of Sam Bankman-Fried

While there is a new tension around the plea of ​​ex-leader Ryan Salame, Sam Bankman-Fried, currently imprisoned in the United States, designates bluntly in an exchange published This October 4, what he considers his most catastrophic decision during the last days of FTX: “By far, the biggest error I made was to give in control of the business”.

Here he refers to the official transfer of the management of FTX to John J. Ray III, intervened on November 11, 2022. Shortly after this signature, SBF claims to have received an appeal concerning a potential investment offer, which he considered sufficient to save the bankruptcy business. But according to him, it was already too late: the document was signed, the management transferred, and the irreversible process.

THE Elements made public today allow to better understand the context and the conditions of this critical tilting:

• On November 9, 2022, two days before bankruptcy, the lawyer Andrew Dietderich of the Cabinet Sullivan & Cromwell (S&C) sends an e-mail to SBF to offer the hiring of John Ray as Chief Restructuring Officer, with a view to a possible bankruptcy;

• On November 11, 2022, SBF officially signed the assignment of control to Ray, which immediately filed for bankruptcy;

• In the meantime, SBF claims to have been contacted about an external funding solution, which he said could have avoided bankruptcy.

This declaration by Sam Bankman-Fried comes almost three years after the facts, while legal and reimbursement procedures are still underway.

A profitable, but disputed restructuring

Since his appointment, John Ray III has supervised a massive restructuring of the Crypto FTX Exchange, with the priority of the recovery of funds for creditors. Indeed, $ 7.8 billion has already been redistributed through three waves of payments (February, May and September).

The objective announced by the Ray team is ambitious: to reimburse at least 98 % of customers up to 118 % of the value of their account, as evaluated in November 2022. In addition, the assets recovered would amount to $ 16.5 billion, while 8.7 billion remain to be returned. This reimbursement trajectory, praised by certain creditors, is used as proof of the rigor of management.

However, this rigor has a cost. The Cabinet Sullivan & Cromwell, involved in the first hours of bankruptcy, received more than $ 171.8 million in legal fees on June 27, 2024, According to Reuters.

In February 2024, a group of creditors attempted to continue S&C for complicity in the fraud and violation of fiduciary duty, accusing the cabinet of having benefited from the financial chaos of the Crypto FTX platform. However, the complaint was abandoned in October 2024.

The words of SBF, if they do not erase its criminal responsibility in any way, therefore revive a sensitive question: would an alternative to bankruptcy have been possible if the timing had been different? Although reimbursements are advancing, this declaration shows more the central role of crisis governance in major bankruptcies in the sector.