SBF claims FTX had ~$60B in collateral in spring 2022, before a credit squeeze, market selloff, and “run on the bank” reduced it to $9B and led to bankruptcy

The former FTX CEO did not address concerns about customer funds being misappropriated or other recent revelations about the company.

CoinDesk 2022-11-23 Nikhilesh De

Context & Ripple Effects

SBF’s explanation of FTX’s collapse centers on a rapid erosion of collateral and liquidity, but it comes after reporting that FTX had only $900M in liquid assets immediately before bankruptcy and that at least $1B transferred from FTX to Alameda was unaccounted for. The new account matters because it offers a market-stress narrative without resolving the customer-fund questions.

The dispute is moving from a founder’s balance-sheet assertion to an asset-by-asset reconstruction. A later bankruptcy hearing’s reported recovery of more than $5B underscores why the location, liquidity, and ownership of assets matter more than a single collateral estimate.

First-order effects

SBF’s account frames FTX’s failure as a credit and liquidity shock, while leaving the reported gap in client funds moved to Alameda unanswered.
FTX’s bankruptcy process must reconcile SBF’s collateral claims with the far smaller reported pool of immediately liquid assets and the status of customer funds.

Second-order effects

The discrepancy between claimed collateral and reported liquid assets makes valuation, ownership, and recoverability the key issues for FTX’s estate rather than the headline value of its holdings.
Alameda’s role becomes central to that reconciliation, given the reported transfers from FTX and the later disclosure of its large credit line.

Third-order effects

If estate findings continue to diverge from FTX’s former management accounts, the case will reinforce that exchange solvency claims require verifiable liquidity and custody records, not aggregate collateral figures.
FTX’s collapse shifts the lasting question from whether a market selloff triggered the failure to whether customer assets were adequately segregated and traceable through affiliated entities.

The trend: Crypto-platform failures are putting greater weight on auditable liquidity, asset custody, and affiliate exposure than on founder-provided balance-sheet narratives.

Discussion

@lizrhoffman Liz Hoffman on x
Letter SBF sent today to FTX employees h/t @CoinDesk https://twitter.com/...
@lizrhoffman Liz Hoffman on x
Setting aside whether there was fraud or not - a question for DOJ - this appears to just be a run on the bank. Crypto tokens are objectively riskier/stupider collateral than mortgage bonds, but neither are cash! Same basic gravitational forces at work here.
@nic__carter Punished Nic on x
SBF is American, spent time lobbying US politicians, had American employees, had US investors, owns US subsids, marketed in the US, spent time on US soil, had hundreds of thousands of US clients. Where the hell is the US criminal justice system? Are we not a nation of laws?
@caspiancey Cas Piancey on x
Remember when the FDIC forced Brett Harrison, former CEO of FTX US, to delete a tweet claiming they were FDIC insured? Feels prescient now for some reason. https://twitter.com/...
@johnedeaton1 John E Deaton on x
Everyone needs to appreciate the outrage. The @DOJCrimDiv has taken jurisdiction and charged wire fraud (18 U.S.C. 1343) over non-Americans, with no contacts with the U.S. (let alone like the ones described below) over a single phone call, email, fax or bank transfer. 🤬 https://t…
@smtuffy Sean Tuffy on x
One of the craziest thing about this letter is that SBF is a double space after a period guy https://twitter.com/...
@wublockchain Wu Blockchain on x
SBF's letter to employees: We likely could have raised significant funding; potential interest in billions of dollars of fundingcame in roughly eight minutes after I signed the Chapter 11. Maybe there still is a chance to save the company. https://twitter.com/...
@lizrhoffman Liz Hoffman on x
See here (SBF's words not mine, a bankruptcy trustee will sort it out, etc): Collateral - mostly crypto - went from being “worth” $60bn to $9bn *fast* Even a “conservative” balance sheet goes upside-down very fast when the assets are garbage and the debts are real. See: Lehman ht…
@ercwl Bearica Wall on x
Man still thinks his exchange was a hedge fund In was in the FTX terms that user deposits aren't to be commingled with its trading business You can't denominate crypto assets into a dollar calculation as a custodian. That's pure fraud. GTFO https://twitter.com/...
@crypto_bitlord7 @crypto_bitlord7 on x
CZ is hands down the goat 🐐 https://twitter.com/...
@rnr_0 Romano on x
I think he forgot to mention - Using customer deposits - Leaking listings to Alameda - Alameda being exempt from liquidations - Lied about being a virgin - Backdoor to transfer customer funds - Lying about balance sheet - Low float high FDV VC-nomic tokens List goes on https://tw…
@doombergt @doombergt on x
Not sure what planet SBF is living on, but it ain't this one https://twitter.com/...
@wallstreetsilv Wall Street Silver on x
@lizrhoffman Leaving out the part about SBF just blatantly stealing customer funds and writing checks to himself, his parents and his insiders? It is a lot more than just a “run on the bank”.
@neiljacobs Neil Jacobs on x
JFC. SBF should be in jail for decades. What is wrong with you people? https://twitter.com/...
@carnage4life Dare Obasanjo on x
In a world where Elizabeth Holmes got 11 years for Theranos and the current FTX CEO called it “worse than Enron”, how is this dude still writing aw shucks emails? Aren't his parents law professors? Are we in the Multiverse of Madness? WTF is going on? https://twitter.com/...
@nlw Nathaniel Whittemore on x
Don't let this rubbish heap of a fake apology distract from what's not mentioned: the billions of stolen customer funds secretly shipped to an insolvent hedge fund with no regard for ethics. https://twitter.com/...
@silvermanjacob Jacob Silverman on x
Nothing in here about misappropriating billions of dollars of customer deposits, loaning himself $1b, giving execs huge amounts of $, all the property purchases, and on and on. But not expecting him to confess to wire fraud at this point. https://twitter.com/...
@thormaximalist @thormaximalist on x
@lizrhoffman @CoinDesk SBF is a criminal. He built a ponzie scheme, with a backdoor. He opened withdrawals to bahamians (insiders) under false pretenses. He has cashed out $100ms from stocks and billions from loans to himself. It wasn't bad risk management, it was theft and embez…
@j_dot_j @j_dot_j on x
Totally normal for the former CEO to pen all-employee paeans to what could have been if he hadn't filed for bankruptcy https://twitter.com/...
@alistairmilne Alistair Milne on x
Note how he denominates assets and liabilities in USD If he wasn't trading customer crypto assets, then both would decrease *together* when market down Overall, this is basically an admission that he was trading other peoples' property in favour of propping up $FTT, etc. https://…
@iamdcinvestor @iamdcinvestor on x
SBF is still totally delusional tbh it's all way worse than i think he can come to terms with i think he'll have some time to himself to ponder it all in its entirety, soon™ https://twitter.com/...
@ldrogen Leigh Drogen on x
could have just replaced all of this with “I stole $10B by making a related party loan to myself, peace out mfers” https://twitter.com/...
@iamdcinvestor @iamdcinvestor on x
it would actually be great if the media stopped giving SBF the benefit of the doubt ("it was all just an accounting and leverage mistake") and instead realized that he was a thief from the beginning, creating illicit backdoors between FTX user funds and Alameda https://twitter.co…
@lilmoonlambo @lilmoonlambo on x
SBF trying to avoid responsibility for stealing user funds: https://twitter.com/...
@iamdcinvestor @iamdcinvestor on x
there is no charitable explanation based on publicly available information, this was clearly fraud and theft a con man continuing to con a new generation of marks, this time most of the journalists it seems would be nice if one could do their job absolutely embarrassing
@lynaldencontact Lyn Alden on x
The media selectivity at covering SBF vs other bitcoin or crypto events has been unusual, regardless of where you are in the political spectrum. https://twitter.com/...
@alexhern @alexhern on x
Two phrases in this that stand out in how casually they are slipped in: “marking everything to market, regardless of liquidity” and “generally” using loans to reinvest in the business, rather than for “large” amounts of personal consumption https://twitter.com/...
@wallstreetsilv Wall Street Silver on x
@DoombergT From that thread, she seems to think it is just, “a run on the bank”. She leaves out the part about SBF stealing customer funds and “loaning” himself over $1 billion. https://twitter.com/...
@stackersatoshi Satoshi Stacker on x
In a new letter to FTX employees SBF states “Maybe there is still a chance to save the company”
@wublockchain Wu Blockchain on x
The loans and secondarysales were generally used to reinvest in the business-including buying out Binance-and not forarge amounts of personal consumption.
@austen Austen Allred on x
(Not to mention all of this is written by the publication whose biggest backer is SBF/FTX)
@davidbelle_ David Belle on x
Guy is still trying to convince people it was simply the market that caused this. Biggest POS for a while. https://twitter.com/...
@billym2k Shibetoshi Nakamoto on x
@lizrhoffman @CoinDesk “hi all - i am a criminal, fraud, and psychopath. i am sorry my pathetic house of cards couldn't continue swindling more people. love you all xoxo” - SBF
@investmentshulk @investmentshulk on x
SETTING ASIDE WHETHER BERNIE MADOFF COMMITTED FRAUD OR NOT - A QUESTION FOR THE DOJ - THIS APPEARS TO BE JUST A RUN ON THE BANK. SAME BASIC GRAVITATIONAL FORCES AT WORK HERE. https://twitter.com/...
@amasad Amjad Masad on x
@hueykwik “This appears to just be a run on the bank” ?? https://twitter.com/...
@adamscochran Adam Cochran on x
1/2 Unbelievable that in his “regrets” lost to staff there is no regret about gambling user funds or building a back door. Just keeps talking about too much leverage and too many liabilities without realizing it was their direct, illegal choices. https://twitter.com/...
@zerohedge @zerohedge on x
“The loans and secondary sales were generally used to reinvest in the business—including buying out Binance—and not for large amounts of personal consumption.” - SBF “Members of the jury, would you consider a $40 million penthouse as a ‘large personal consumption’.”
@futurenomics Sam on x
Let me explain this in very simple language： 1) Alameda borrows user deposits from FTX against Fake Token 1 2) Alameda uses this money to buy more of Fake Token 1 3) Fake Token 1 goes up 4) Alameda borrows more money. 5) Repeat :) This is not just a run on the bank. https://twitt…
@lizrhoffman Liz Hoffman on x
This mostly makes sense to me. FTX had a lot of collateral ($60bn) against not that many liabilities ($2bn). The problem is that collateral was monopoly money and the liabilities were ... real money. Just real basic banking stuff.
@autismcapital @autismcapital on x
Sam has shared the below letter with FTX employees. The takeaway is an absence of responsibility with zero admission that the factors that led to this debacle were in his control. Sam claims that he didn't “realize the magnitude of risk.” The main remorse is that he got caught. h…
@mdudas Mike Dudas on x
that @semafor donation really paying dividends for @SBF_FTX rn... https://twitter.com/...
@amasad Amjad Masad on x
When you see a journalist carrying water for SBF — “it's just a bank run” — it's 100% the case they're on the payroll. https://twitter.com/... https://twitter.com/...
@caspiancey Cas Piancey on x
I think questions about why SBF hasn't been arrested are actually fair now. Madoff was arrested within a few days of the collapse of his fund. He was allowed to post $10 million bail, but he was arrested.
@andy8052 Andy on x
SBF still incapable of understanding that his illiquid shitcoins are not worth billions of dollars https://twitter.com/...
@jgreco Jim Greco on x
Here's the thing that you learn after the age of 7: An apology also requires you to take accountability for your actions. Just mouthing the words while continuing to lie isn't an apology. https://twitter.com/...
@lizrhoffman Liz Hoffman on x
2/2 https://twitter.com/...
@milessuter @milessuter on x
The FTX situation has been a massive redpill for anyone that previously trusted the media but saw with their own eyes the events unfold over last few week. ‘The CEO literally admitted to the most blatant form of fraud, but as a mere journalist™ who am I to pass judgement here?’ h…
@inartecarlodoss @inartecarlodoss on x
Can someone explain to me, how the fuck is Assange's life totally destroyed for over 10 years now and SBF is still wearing his oversized shorts running around free in the Bahamas?
@thormaximalist @thormaximalist on x
SBF was supposed to custody deposits at a 1:1 ratio. He didn't. He stole your money and used it for something else. That's the only story. There is no other story. Call out journalists agressively. They keep lying with impunity. They promoted this ponzie on the way up. Hard.
@maxboonen Max Boonen on x
“We literally could have raised billions of dollars” Definition of good money after bad https://twitter.com/...
@adamscochran Adam Cochran on x
2/2 Already broke down in this thread the math behind the leverage claim being impossible without Alameda having a non-liquidating, no limit, backdoor account: https://twitter.com/...
@nic__carter Punished Nic on x
Why is this journo uncritically accepting Sam's ludicrous spin? Well let's start with Sam's “donations” to Semafor, the publication she writes for https://twitter.com/...
@iamdcinvestor @iamdcinvestor on x
what is so hard to understand? wannabe wunderkind, drunk on his own perceived abilities and attention from celebs and big VCs put on shoes way too big, created mechanisms to protect himself, used those mechanisms a the expense of customers, lost it all, and cannot come to terms
@smtuffy Sean Tuffy on x
In fairness to SBF, if I had stolen money from organized crime, terrorists, drug cartels, and rouge states - I too would be doing everything thing I could to get customers their money back
@johnedeaton1 John E Deaton on x
This letter by @SBF_FTX is total horseshit. On its face it makes no sense. He said there was $2B in liabilities in paragraph 1. In paragraph 2 he says there was $8B in liabilities. My immediate thought was that equals $6B in customer funds that he used and lost. https://twitter.c…
@trader1sz @trader1sz on x
Bullshit is he sorry. Man's out there spending clients money on properties. If he meant it, sell them and give something back to FTX clients https://twitter.com/... https://twitter.com/...
@austen Austen Allred on x
This is insane. FTX was a custodian, not a hedge fund. If I give you money to put in a vault and you lose it gambling, the problem isn't your gambling prowess. https://twitter.com/...
@mdudas Mike Dudas on x
SBF another in a long line of sociopaths that includes Do Kwon, Su Zhu, Alex Mashinsky and Kyle Davies who show little to no true remorse for their actions and imply that the fraudulent insider dealings that doomed them were a byproduct of market forces https://www.coindesk.com/.…
@macrocephalopod @macrocephalopod on x
Incredible that SBF can still be writing shit like this and expect to be taken seriously while ignoring the #1 most important fact — in a real business, if you custody customer funds then ASSETS = LIABILITIES If that is ever not the case then you have already fucked up. https://t…
@doombergt @doombergt on x
Each day that goes by and SBF isn't arrested is Proof of Rot™️
@longshorttrader @longshorttrader on x
Question: How do you know SBF is lying? Answer: As soon as his lips move, or he puts words into writing. Despite the irrefutable evidence that SBF and alameda/ftx were frauds since inception, I'm amazed people actually take what he says at face value: https://twitter.com/...
@thecryptomars @thecryptomars on x
SBF right now! https://twitter.com/... https://twitter.com/...
@satsdart @satsdart on x
not a single mention of using customer funds, why does he keep pretending like holding the same amount of customer funds in “collateral” is enough?? so stupid https://twitter.com/...
@carnage4life Dare Obasanjo on x
The wildest part of all the crypto scandals is how many of the masterminds are on the run in extradition free countries just tweeting & dropping in on podcasts like they just happen to be on vacation. https://twitter.com/...
@johnnyp135dfs John on x
A “run on the bank” shouldn't be possible on an exchange unless they did a fraud - the reporting on this SBF/FTX situation continues to be so insane https://twitter.com/...
@frances_coppola Finance Cassandra on x
Apart from that... 1) SBF no longer has any position in the company. He should not be writing to employees. 2) There are actual lies in this missive, and the whole thing seems intended to mislead. He's still gaslighting people. https://twitter.com/...
@renato_mariotti Renato Mariotti on x
Although this is meant to seem like acceptance of responsibility, SBF's “apology” is actually self-serving. He thinks he's helping himself by focusing on mismanagement rather than fraud, but he is just locking himself into a story in the early stages of DOJ & SEC investigations. …
@schuldensuehner Holger Zschaepitz on x
OUCH! FTX Collapse tarnishes Sequoia's reputation, prompts apology: Top partners at the powerful VC firm apologized to their investors in a conference call Tuesday for backing FTX w/investments totaling $214mln across 2 funds. https://www.bloomberg.com/... https://twitter.com/...
@lizhabib Liz Habib on x
This is laughable. Sequoia Cap. - lost $150MM in FTX - is telling its fund investors it will improve due diligence. FTX didn't even have an accounting department - HOW DID SEQUOIA MISS THAT? https://www.wsj.com/...
@howardlindzon Boring Howard Lindzon on x
I'm hearing that Sequoia has issued an apology to LP's. I approve. I am sure a few of VC's on the Sequioa Penski/FTX file are manning the Russia office now.
@scottmelker @scottmelker on x
Our bad, next time we will actually ask for information before throwing our money at a kid playing video games. https://www.wsj.com/...
@berber_jin1 Berber Jin on x
SCOOP - In a conference call to LPs, Sequoia apologized for its $150 million loss on FTX and vowed to conduct more thorough due diligence on future investments an extremely rare moment of contrition for the firm More to come in story below: https://www.wsj.com/...
@heathersomervil Heather Somerville on x
SCOOP from ⁦@berber_jin1⁩ — Sequoia Capital Apologizes to Limited Partners for FTX Investment: a very, very rare moment of contrition indeed. https://www.wsj.com/...
@joeemison Joe Emison on x
Pretty wild how Sequoia went from, “We do excellent due diligence and FTX was just one of those cases that isn't successful” to apologizing for poor due diligence and saying they would have a Big Four accounting firm review early-state startup financial statements in 10 days.
@carnage4life Dare Obasanjo on x
There are 3 types of crypto projects 1. Pump & dumps and pyramid schemes (e.g shitcoins, NFTs, play to earn) 2. Taking advantage of lax regulations (e.g stablecoins, DeFi) 3. Using blockchain when a SQL database would do just fine. Which will survive? https://www.wsj.com/...
Vox Emily Stewart on x
FTX is over. Is crypto, too? — Crypto is the cat with nine lives, but some wonder if FTX might be the last one.
@jacqmelinek Jacquelyn Melinek on x
Timeline of the FTX collapse, presented during the first day hearing at the U.S. Bankruptcy Court “At 4:30 am on November 11th, Mr. Bankman-Fried resigned,” James Bromley, partner at Sullivan and Cromwell said. https://twitter.com/...
@davidgura David Gura on x
Bedlam on the U.S. Bankruptcy Court Zoom call of the FTX “first day” hearing... During a ten-minute recess, some of the 500+ participants are intermittently playing music, saying they want their money back, etc.
@ericbalchunas Eric Balchunas on x
Can we stop saying “allegedly” now? A “substantial amount” of FTX Group's assets “have either been stolen or are missing,” an attorney representing the firm told a bankruptcy court https://www.bloomberg.com/... via @business
@intangiblecoins Alex Thorn on x
*judge in FTX bankruptcy rules in favor of debtors (FTX) to keep all unsecured creditor information redacted for now this means we will not have immediate ability to further assess contagion
@tier10k @tier10k on x
[DB] FTX Bankruptcy: Judge Will Allow Redaction of Customer Names and Addresses on an Interim Basis
@tbr90 Tyler Reynolds on x
In 5 days we've gone from FTX executives being “potentially compromised” to “some or all compromised” And given how the MSM has framed this as “mismanagement” when it is clearly fraud & theft means that this rabbit hole goes quite deep https://twitter.com/...
@reuters @reuters on x
FTX was run as a ‘personal fiefdom’ of former CEO Sam Bankman-Fried, attorneys for the collapsed crypto exchange said in its first bankruptcy hearing, as they detailed ongoing challenges such as hacks and substantial missing assets https://www.reuters.com/... https://twitter.com/…
@blevimyers Ben Myers on x
Excerpt: He said the company had faced “cyber attacks,” and that assets were still missing. He appeared to be referring to the sudden movement of hundreds of millions of dollars in FTX assets in unauthorized transactions on the day the company filed for bankruptcy. https://twitte…
@tombevanrcp Tom Bevan on x
Turns out the report that FTX spent $121 million on real estate in the Bahamas - including a $16 million home for SBF's parents - was off by about $180 million. https://www.cnbc.com/... https://twitter.com/...
@ryan_browne_ Ryan Browne on x
FTX's lawyers anticipate there are “millions” of customers owed money by the firm. They've been granted a motion by the judge to withhold client information (for now), which they said would infringe on privacy if published.
@davidgura David Gura on x
FTX “was run as a personal fiefdom of Sam Bankman-Fried,” Sullivan and Cromwell's James Bromley tells the U.S. Bankruptcy Court, noting that there was “a lack of corporate controls at a level that none of us in the profession that have looked at it so far have ever seen.”
@tree_of_alpha @tree_of_alpha on x
FTX CONTINUES TO SUFFER CYBERATTACKS AS BANKRUPTCY BEGINS, “SUBSTANTIAL” ASSETS ARE MISSING - FTX ATTORNEY Lawyer slang for “y'all are definitely not getting a cent out of this”.
@davidgura David Gura on x
We have learned in U.S. Bankruptcy Court, from one of the FTX Debtors' attorneys, that in January 2022, the value of FTX's U.S. and international businesses was $40 billion. (The U.S. business was valued at $8 billion, and the international business was valued at $32 billion.)
@kensweet Ken Sweet on x
NEW YORK (AP) — Lawyers for FTX disclosed Tuesday that a “substantial amount” of assets has been stolen from the accounts of the collapsed cryptocurrency exchange, diminishing the odds that its millions of investors will get their money back. https://apnews.com/...
@kadhim @kadhim on x
FTX attorney Bromley says “substantial funds” were transferred to Alameda from FTX and other parts of SBF's empire. “One of the US debtors ... purchased almost $300mn worth of real estate in the Bahamas.” Most of those properties were execs' homes/vacation properties, he says
@markamesexiled Mark Ames on x
🔥"It is not clear who had the authority to hire Sullivan & Cromwell for the FTX bankruptcy case or who had the authority to hire the new FTX CEO, John Ray III. The pleadings in the case thus far fail to indicate who it was that hired them." https://wallstreetonparade.com/ ...
@tier10k @tier10k on x
Someone is playing Sorry by Justin Bieber on the FTX bankruptcy hearing zoom
@davidgura David Gura on x
Sullivan and Cromwell's Brian Glueckstein, representing the FTX Debtors, tells the U.S. Bankruptcy Court he “anticipates millions of creditors in these Chapter 11 cases.”
@ryan_browne_ Ryan Browne on x
Some top lines from FTX's lawyer in the bankruptcy hearing so far: - FTX was run as the “personal fiefdom” of SBF - A “substantial amount” of assets have been either stolen or are missing - $300 million was spent by FTX on real estate in the Bahamas https://www.cnbc.com/...
@nikhileshde Nikhilesh De on x
“Your Honor, what we have is a worldwide organization, but an organization that was run effectively as a personal fiefdom of Sam Bankman-Fried,” says Sullivan Cromwell attorney #FTXbankruptcy https://twitter.com/...
@akikofujita Akiko Fujita on x
“We have probably witnessed one of the most abrupt and difficult corporate collapses in the history of corporate America.” Good roundup from ⁦@DsHollers⁩ on day one of bankruptcy hearings for #FTX https://finance.yahoo.com/...
@alexqgb @alexqgb on x
Effective Selfishness (until suddenly it isn't) https://twitter.com/...

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