SBF is blogging now

It’s Monday, Jan 16th - Welcome to the Cryptohunt Jam, where we spend a minute a day explaining what is happening in crypto and other game-changing ideas. As always: In plain English.

Sam Bankman-Fried is back! This time with a blog post, detailing his version of what led to FTX's collapse.

Let's take a quick, and critical look.

This post, which SBF published on the blogging site Substack, is astonishing for multiple reasons.

For once, it is very unusual that a defendant in a major fraud case says anything at all before their trial. Talking rarely helps, and can be used against them. Lawyers usually do the talking, because they are trained in not getting their client into more trouble.

SBF? Doesn't care. He's blogging away, including spreadsheets and data to make his case.

And what is that case? Essentially that the market wiped out FTX, and he did nothing wrong.

Well, for the sake of it, let's follow along: SBF explains how Alameda Research, the trading firm he funded before FTX, had significant bets riding on crypto last year. According to his calculations, those bets were covered if the value of the crypto they were trading would decline by up to 94%.

And they did, in fact even more than that. When FTX declared bankruptcy, those assets were down 96% - which SBF blames on the crypto market and a targeted PR attack from rival Binance.

But how does that affect FTX? Well, to make those bets, Alameda borrowed money from their sister company - money that was then wiped out, leaving customers unable to withdraw their balances from FTX.

The way SBF lays this out is that this is just business, a bad market, and a coordinated rush of withdrawals. The perfect storm, but not his fault.

We have a feeling the prosecution is seeing this very differently - because why was Alameda allowed to dip into customer deposits on FTX in the first place? Why have Alameda's execs already pleaded guilty and are collaborating?

Stay tuned, it'll get more interesting we bet. SBF, he blogs, has a lot more to say. Well, at least it keeps us entertained, because the trial is not set to start until October 2nd.

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