A look at a draft copy of Sam Bankman-Fried's planned House testimony, including accusations against John Ray and screenshots from a chat with Changpeng Zhao

Sam Bankman-Fried, founder of collapsed crypto exchange FTX, was scheduled to testify Tuesday before the U.S. House of Representatives Committee on Financial Services.

Forbes 2022-12-13 Steven Ehrlich

Context & Ripple Effects

Bankman-Fried had previously become a prominent participant in Washington's crypto-policy debate before FTX's collapse, as charted in his rise as a public face of crypto in DC. The draft gives his intended House appearance a defensive frame centered on accusations against John Ray and material involving Changpeng Zhao.

That account was set against John Ray's House testimony that FTX and Alameda commingled customer assets, creating an immediate conflict with the new CEO's account of FTX's internal controls. The dispute matters because it shifts the hearing from a straightforward collapse narrative toward competing claims from the company's former and current leadership.

First-order effects

John Ray faces a direct public rebuttal from Bankman-Fried's planned testimony, while the House Financial Services Committee must weigh it against Ray's account of FTX and Alameda.
Changpeng Zhao is pulled into Bankman-Fried's public narrative through screenshots of their chat, making their communications part of the hearing's surrounding record.

Second-order effects

Bankman-Fried's draft establishes the executive-blame narrative he later continued in a public account of FTX's collapse, even as related coverage says former executives had pleaded guilty.
The contrast between Bankman-Fried's assertions and Ray's testimony gives congressional scrutiny a contested factual record rather than a single management account.

Third-order effects

The progression from policy-facing crypto executive to congressional subject reflects a broader credibility test: exchange leaders' public claims are increasingly judged against internal records and successor management's disclosures.
As later testimony showed Bankman-Fried being challenged with his own communications, FTX points toward accountability processes in which founders' messages can carry more weight than their public narratives.

The trend: FTX is part of crypto's shift from seeking policy legitimacy through prominent founders to testing that legitimacy through institutional oversight and documentary evidence.

Discussion

@sarahnemerson Sarah Emerson on x
BREAKING: Forbes obtained a draft of the testimony @SBF_FTX was scheduled to present before Congress tomorrow, and has published it in full. Just hours ago, Bankman-Fried was arrested and taken into custody by Bahamian authorities. From @Steven_Ehrlich: https://www.forbes.com/...
@layahheilpern Layah Heilpern on x
SBF getting arrested isn't a good thing. He was meant to testify under oath before Congress today who would then charge him with a crime. Prosectors just saved SBF from incriminating himself. It's all a joke and they've all been paid off.
@autismcapital @autismcapital on x
Statement from Maxine Waters regarding SBF. https://twitter.com/...
@fillbeforeshill Roy Blackstone on x
Can't believe you guys are being so antisemitic by accusing SBF of fraud https://twitter.com/...
@crypto_chase @crypto_chase on x
SBF testimony in a nutshell “FTX US is solvent.. Americans can be made whole.. plz don't put me in jail” “Chapter 11 team needs me! FTX platforms are complex.. only I can potentially make customers whole! Plz no jail” Desperate attempts at a 2nd chance. Pretty naive for 30 y/o
@smtuffy Sean Tuffy on x
lol https://twitter.com/...
@iseult @iseult on x
BREAKING: SBF states “The dog ate my homework” https://twitter.com/...
@smtuffy Sean Tuffy on x
This is just absolutely wild https://www.forbes.com/...
@smtuffy Sean Tuffy on x
Since SBF probs won't be able to make the House Financial Services Committee hearing tomorrow, maybe Brett can join instead? He was in charge of FTX US after all.
@andrewperezdc Andrew Perez on x
Before his arrest, SBF was getting ready to testify to Congress that the FTX collapse happened in part because he was spending too much of his time talking with regulators and policymakers in DC https://www.forbes.com/... https://twitter.com/...
@smtuffy Sean Tuffy on x
I love that SBF includes screen shots of a collusion group chat as some sort of defense https://twitter.com/...
@molly0xfff Molly White on x
Statement from @RepMaxineWaters on the arrest of @SBF_FTX. She says she was surprised to hear of the arrest, and is “disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow”. https://twitter.com/...
@robinwigg Robin Wigglesworth on x
Looks like Sam Bankman-Fried was just planning to rehash his greatest hits in testimony before his arrest? https://www.forbes.com/... https://twitter.com/...
@napgener @napgener on x
Sellers are out of coins https://twitter.com/...
@robinwigg Robin Wigglesworth on x
LOL. Bankman-Fried claims Alameda had assets of about $114 BILLION in late 2021. https://twitter.com/...
@hsakatrades @hsakatrades on x
>Commits largest case of financial fraud >Ruins thousands of innocent lives Opens his testimony with: - I, me, myself - How he views himself - His net worth - Gratitude for his family and food on his plate If Narcissism was a religion, The Goblin would be their god. https://twitt…
@jeuasommenulle JohannesBorgen on x
I guess the SBF testimony was conveniently leaked since he's arrested now & can't deliver it. Fascinating read ofc. What strikes me most is that the part blaming Binance's is 3x times longer than the part blaming (failing) FTX internal controls. https://www.forbes.com/...
@kr00ney @kr00ney on x
Statement from @RepMaxineWaters on SBF arrest (night before he was set to testify before her committee) “..The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity.” https://twitter.com/.…
@workmj Michael Jackson on x
“While Ray and his team tried to get control of FTX's computer systems, they watched as someone minted new coins. Eventually, they concluded it was Bankman-Fried and Wang working at the behest of the Bahamas.” Wild story gets wilder. https://www.bloomberg.com/...
@jeffjohnroberts Jeff Roberts on x
Jesus. Bahamas told SBF to mint new coins just as FTX was collapsing. Did government officials arrest SBF so quickly b/c they feared DOJ would indict them too? https://www.bloomberg.com/... https://twitter.com/...
@bradmichelson Brad Michelson on x
uh what??? SBF lawyers allege: - Bahamas gov tried to help SBF regain access to key computer systems - Gov asked SBF to mint new coins worth $100M+ and transfer them to island officials - Gov got withdrawals open for for Bohemians before bankruptcy filing https://www.bloomberg.co…
@claireeboston Claire Boston on x
I know there is just a bit of SBF out there right now but can we talk about this BONKERS new filing to hit the bankruptcy docket?https://www.bloomberg.com/ ...
@financeleo @financeleo on x
The plot thickens https://twitter.com/...
@umbrella_uni @umbrella_uni on x
So Bahamas wanted the mint() function enabled, wonder if this is evidence showing who was the Exploiter / Hacker? https://www.bloomberg.com/...
@kadhim @kadhim on x
New FTX boss John Ray in prepared congressional testimony points to 5 initial findings that indicate where FTX customer money went: https://docs.house.gov/... https://twitter.com/...
@nic__carter @nic__carter on x
it's over. https://twitter.com/...
@deitaone @deitaone on x
FTX USED COMPUTER INFRASTRUCURE THAT GAVE SENIOR MANAGEMENT ACCESS TO SYSTEMS THAT STORED CUSTOMER ASSETS- RAY PREPARED TESTIMONY FTX STORED CERTAIN PRIVATE KEYS TO CRYPTO ASSETS WITHOUT EFFECTIVE SECURITY CONTROLS- RAY TESTIMONY
@nic__carter Punished Nic on x
impossible to overstate how completely over it is for him. this is the first real smoking gun. the hearing tomorrow will be absolutely bananas. 10 am ET tomorrow. clear your schedule https://financialservices.house.gov/ ...
@bobonmarkets Robert Burgess on x
John Ray doesn't hold back: “The FTX Group's collapse appears to stem from the absolute concentration of control in the hands of a very small group of gross inexperienced and unsophisticated individuals” https://financialservices.house.gov/ ...
@cmsholdings ChristMaS on x
Congress Pregame https://financialservices.house.gov/ ...
@kadhim @kadhim on x
Number 3 — a $5bn “spending binge” — aligns with the FT's reporting about FTX's venture capital portfolio: https://www.ft.com/... https://www.ft.com/...
@molly0xfff Molly White on x
FTX CEO John J. Ray III: “Questions have been raised as to why all of the FTX Group companies were included in the Chapter 11 filing, particularly FTX US. The answer is because FTX US was not operated independently of FTX.com.” 1/4
@renato_mariotti Renato Mariotti on x
Ray's testimony makes clear that Sam Bankman-Fried and FTX have serious liability. This much is clear: 1) FTX promised customers their $ would remain there. 2) FTX sent the $ to Alameda and SBF (via loan). If SBF knew both and had the intent to defraud, he's guilty of fraud. http…
@cailen @cailen on x
Wonder if @BillAckman or @kevinolearytv believe John J. Ray III or SBF https://twitter.com/...
@fintechfrank Frank Chaparro on x
“Nearly all of these situations share common characteristics, ranging from gross mismanagement, excessive leverage, failures of internal controls, failures of external checks as a result of audit firm failures, or insufficient board governance.” ~ FTX CEO John Ray
@altcoinpsycho @altcoinpsycho on x
From John J Ray: “Questions have been raised as to why all of the FTX Group companies were included in the Chapter 11 filing, particularly FTX US. The answer is because FTX US was not operated independently of FTX[.com]” This directly contradicts what @SBF_FTX has said https://tw…
@deitaone @deitaone on x
FTX FAILED TO IMPLEMENT VIRTUALLY ANY SYSTEMS NECESSARY FOR COMPANY ENTRUSTED WITH PEOPLE'S MONEY OR ASSETS- RAY PREPARED TESTIMONY https://twitter.com/...
@bcbacker @bcbacker on x
What SBF was up against tomorrow, but will no longer need to answer to in front of Congress: https://twitter.com/...
@jyarow Jay Yarow on x
Where the FTX money went. Only a billion to the execs? https://www.cnbc.com/... https://twitter.com/...
@coryklippsten @coryklippsten on x
From John J. Ray testimony for Congress this week, FTX US was NOT operated separately from FTX. Don't trust Scam Bankster-Fraud!! https://twitter.com/...

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