Sam Bankman-Fried Admits FTX Issued Fake Bitcoin

The failed FTX founder Sam Bankman-Fried’s apology roadshow continues and like how a fish gets caught in the mouth, the once crypto wunderkind is slowly unraveling the mirage he put up.

In a Twitter space touted “SBF First Crypto Appearance” by Mario Nawfal’s The Crypto Roundtable, Bankman-Fried was asked to expound on why there’s no more bitcoin to withdraw during the liquidity crunch of the bankrupt exchange. Co-host of the audio show Ran Neuner characterized the situation as customers having a hard time withdrawing their bitcoin balances because “bitcoin actually didn’t exist” on the platform.

“You’re just letting us buy notional tokens that didn’t actually really exist,” Neuner pushed.

Bankman-Fried agreed with Neuner, saying it is “another way of phrasing” what happened to FTX.

“Right, yeah, I believe that what you’re saying is in fact, part of what happened,” Bankman-Fried responded.

Not too long ago, Daniel Friedberg, the Chief Regulatory Officer for FTX and Alameda, also essentially admitted to counterfeiting crypto in a call with Nugenesis.

“They may have counterfeited the coin,” Friedberg said. “All we did is push a button through an exchange. We didn’t intend to do [fake coins] certainly… We have a new coin in our exchange account, we send it to you using the exchange account… Who knows, I don’t know, because that’s not on the blockchain.”

The Twitter space appearance comes after Bankman-Fried’s guesting on The New York Times’ DealBook Summit, where he claimed that FTX US was solvent.

The now-bankrupt FTX has finalized its chapter 11 proceedings as its implosion took a lot of crypto names with it.

Most recently, crypto lender BlockFi filed for bankruptcy, revealing it has around $355 million in crypto assets frozen in the bankrupt crypto exchange.

Genesis Global’s lending arm announced that it is temporarily freezing redemptions and new loan originations after declaring it has around $175 million locked in FTX. 

Ikigai Asset Management also revealed its exposure to FTX earlier this month, resulting in the firms halting their respective withdrawals. In its Q3 2022 report, Galaxy Digital reportedly had around $76.8 million in cash and digital assets invested in the embattled crypto exchange, around $47.5 million of which is in the process of being withdrawn.

Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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