Sam Bankman-Fried Blames Handover for FTX's Collapse, Sees $7.8B Distributed to Creditors
Sam Bankman-Fried (SBF), the former CEO of cryptocurrency exchange FTX, is serving a 25-year jail sentence. He believes he could have saved the company from bankruptcy if he hadn't handed it over to new management under extreme pressure. FTX's collapse led to a complex bankruptcy process, with significant distributions to creditors and ongoing concerns about conflicts of interest.
FTX's downfall began when John J. Ray III took control, filing for chapter 7 bankruptcy and hiring Sullivan & Cromwell (S&C) to oversee the process. SBF, who had previously been advised by S&C, was pressured to hand over the company. He now considers this his 'single biggest mistake'.
SBF was invited to testify before Congress by Rep. Maxine Waters (D-Calif.) in December 2022, but he was arrested by Bahamian police beforehand while preparing his testimony. Minutes after signing the handover, SBF received a call about a potential external investment that could have saved FTX. As of September 30, 2025, the FTX estate has distributed $7.8 billion to creditors.
Concerns have been raised about potential conflicts of interest in the bankruptcy process. S&C had advised FTX prior to its bankruptcy, and John J. Ray III's appointment as CEO led to questions due to his previous associations with similar cases.
The FTX saga continues to unfold, with SBF serving his sentence and the bankruptcy process ongoing. Despite his belief that FTX could have been saved, the company's collapse has led to significant distributions to creditors. The complex nature of the bankruptcy process, including potential conflicts of interest, remains a topic of discussion.
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