SBF claims law firm Sullivan & Cromwell pressured him into bankruptcy filing for legal, consultancy fees SBF claims law firm Sullivan & Cromwell pressured him into bankruptcy filing for legal, consultancy fees
SBF planned testimony released in light of arrest in Bahamas prior to U.S. House of Representatives testimony.
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Updated: Aug. 22, 2023 at 2:26 am UTC
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Former FTX CEO Sam Bankman-Fried (SBF) claims in his planned testimony before the U.S. House of Representatives Committee on Financial Services that he was pressured into filing for bankruptcy for the FTX companies by the law firm Sullivan & Cromwell, asserting that their motivation for doing so was the potential legal and consultancy fees.
SBF was set to testify before the U.S. House of Representatives Committee on Financial Services on Dec. 13. However, he was arrested in the Bahamas on Dec. 12, at the request of the U.S. government.
Forbes obtained a draft of Bankman-Fried’s planned testimony and has published it verbatim.
In the testimony, SBF makes a claim under ‘Chapter 11’ that he had received an “offer for billions of dollars to help make customers whole,” shortly after signing a nomination for John Ray to take over FTX as CEO.
SBF states that he instructed his counsel to rescind the document only moments later to find this it was not possible to do so. The testimony also reports that “Sullivan & Cromwell lawyers were submitting it on [SBF’s] behalf despite [SBF’s] instructions not to.”
SBF claimed that the Ray nomination document was filed by Sullivan & Cromwell against his wishes “roughly 6 hours later.”
SBF then claimed that Ray filed for Chapter 11 afterward for all FTX entities “-including a fully solvent US entity, FTX US, in which they shut down customer access and withdrawals.”
According to the testimony, The Bahamas Attorney General, Ryan Pinder, released an official statement:
“It is possible that the prospect of multimillion-dollar legal and consultancy fees is driving both [the Chapter 11 team’s] legal strategy and their intemperate statements.”
SBF concluded page nine of his testimony with a screenshot revealing a message from General Counsel at FTX, Ryne Miller, requesting consent to send “SullCrom” $4 million to ensure representation “from FTX.com cash.”
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Josh O'Sullivan
Josh has been writing for a decade and is passionate about mainstream crypto adoption, bringing positive financial change to the masses through crypto and decentralized finance as a whole.
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FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
John J Ray III is the Chief Restructuring Officer and now-appointed CEO of FTX, a cryptocurrency derivatives exchange.