Will FTX assets would be worth $136 billion today if left to run?

Sam Bankman-Fried again challenges the core narrative of his downfall: that FTX was insolvent when it collapsed in November 2022.

In a page of 15 report written from prison and dated September 30, the convicted founder claimed that the exchange “was never insolvent” but only trapped in a “liquidity crisis” after customers withdrew $5 billion in two days.

He argued that FTX and its trading arm, Alameda Research, together held $25 billion in assets and $16 billion in equity value against about $13 billion in liabilities. According to him, his companies had enough to repay the customers in full if the company had been allowed to continue operating.

He wrote:

“FTX has always had enough assets to repay all clients, in kind, and also provide significant value to equity holders. This is what would have happened if the lawyers had not taken FTX.”

Instead, Bankman-Fried blames outside counsel and the new CEO John J. Ray III to push FTX into Chapter 11 before the bailout funding could be completed.

His framing of FTX’s problem as a liquidity problem, rather than insolvency, serves to soften the allegations of fraud and redirection. blame it on the legal team that froze the operations.

If accepted, it turns the implosion from one of abused deposits into a fixable bank run cut by excessive lawyers.

Solvency by hindsight

In its report, Bankman-Fried treats FTX’s frozen portfolio as if it had survived the entire 2023-25 ​​market recovery intact.

Recover the assets of the bankrupt company Solana, robinhoodSui, Anthropic, and even the FTT token are now worthless at current values, suggesting that by the end of this year, the basket would be worth about $136 billion. This easily covers the $25 billion he cites in customers and receivables.

From there, he insists, everyone could be paid “in full, in kind,” and the equity investors would still walk away with billions.

However, this reasoning is wrong since it is “solvency from the bull market”.

Bankruptcy law does not allow a failed company to keep trading for years in the hope that rising prices will fix its balance sheet. Once Chapter 11 is filed, claims are frozen as of the petition date, converted to dollars, and pursued through recovery, not speculation.

Like former FTX general counsel Ryne Miller he indicated: :

“This week in November 2022, the assets on hand were nowhere near adequate, and the founders were fabricating asset lists (and desperately chasing new investors). The coins are gone, folks. Your coins are gone. That’s why the bankruptcy happened.”

This means that the majority of FTX’s portfolio has been built with pooled client funds. No court would have allowed those assets to remain at risk while management played a rebound.

The Bankman-Fried math only works if regulators and creditors had let an exchange under criminal and liquidity stress continue to operate normally for another two years, a scenario that borders on fantasy.

The FTX reboot that never happened

The same optimism underlies his claim that FTX was “closed too soon.”

Bankman-Fried insists the exchange was still earning about $3 million a day and nearly $1 billion a year when Ray ceased operations. It also maintained that management had identified $6 billion to $8 billion in emergency funding that could have closed the hole “by the end of November 2022.”

This line of argument assumes that FTX was a going concern, that trading would have continued, customers remained, and the venture portfolio could have avoided fire sale discounts.

But by mid-November, the exchange faced a complete collapse of confidence. Counterparts flee, licenses have been suspended, and law enforcement agencies roamed. In these conditions, keeping FTX live would have risked deeper losses and regulatory reactions.

However, industry experts noted that the bankruptcy estate chose the safest route of freezing the accounts, preserving what was left, and pursuing the orderly recovery of assets under the supervision of the court.

In fact, Miller suggested that the bankruptcy estate decision helped save some value, rather than destroy it.

According to him, the disciplined management of the estate of the Solana and Anthropic parties of FTX, both of which have greatly appreciated in the recovery, has become one of the main reasons why the creditors can now be sanctioned.

This means that Bankman-Fried’s picture of a profitable firm unfairly shut down by lawyers overlooks these realities. Their assumptions about ongoing earnings and investor confidence belong in a world that no longer exists once confidence evaporates.

Competing timelines, competing truths

At its core, the dispute centers on which timeline defines the company’s reality.

Bankman-Fried measures solvency by 2025 asset prices and a business that is never closed. The bankruptcy estate is measured by what was left in November 2022.

On the summer timeline, FTX faced an $8 billion hole, assets were illiquid or overvalued, and new financing efforts had stalled. Freezing operations and the conversion of claims into dollars were the only right course.

On Bankman-Fried’s timeline, the intervention act caused the damage as the lawyers “commanded” the company, sold the assets in a rising market, incurred almost $1 billion in fees, and “destroyed” more than $120 billion in hypothetical realization.

That inversion turns cleanliness into the culprit. It recast a standard court-supervised liquidation as a hostile takeover that allegedly vaporized future value.

Yet the central fact remains unchanged: when customers demanded their money, FTX was unable to pay. Everything else is retroactive history.

As ZachXBT blockchain researcher frames it:

“SBF is just trying to weaponize the fact that every FTX asset/investment has grown since the November 2022 picobottom prices when in fact they could not pay users at the time of bankruptcy and instead point to the bankruptcy team as the real villain.”