FTX Users to Receive 112% REFUND, FTX Claims BILLIONS MORE 'Remaining' - Bankman-Fried Family Says Lawsuit Was Unfair, Sam Didn't Lose Any User Funds... | Cryptocurrency News Live

This story never runs out of surprising twists and turns, and this one is huge.

Look back at almost any media coverage or old posts made in online crypto communities by your average trader – in everyone’s mind it was a story about people losing billions. At one point this was probably true, when the market had just been hit by the Collapse of Terra/Luna It should not be downplayed how much this story changes when it no longer involves losing money.

At one point, all FTX users who had funds on the exchange when it closed thought they lost money, and many expected to find out it was all gone.

Searching for old posts in online crypto communities at the time FTX shut down the trade show, there was little hope that they would recover the funds they left in FTX-controlled wallets.

Now we finally know how the story ends for FTX users: they get everything back, and then some.

FTX Owes $11.2 Billion – All This and More is Ready to Be Paid Immediately…

Under new management following FTX’s filing for bankruptcy and the arrest of its former executives, the liquidation of the company’s assets has begun. This mainly involved dumping massive amounts of crypto over the past few months, enough that the $11.2 billion owed is already in US dollars that they can access at any time. But there is more to come, as they claim to still have over $2 billion worth of crypto that cannot be sold yet.

Sam participated in a common practice among venture capital firms where projects offer them the opportunity to invest early by purchasing coins at an extremely low price. However, these coins are “locked” and can only be redeemed at a later date.

Most of FTX’s recent cash flow comes from Sam’s initial investment in Solana, where he reportedly paid 0.20 cents per coin – they’re worth $133 each today, but the team’s bankruptcy of FTX allegedly paid a significant amount during the negotiation. at $200.

Solana was the largest source of funds, worth billions, but FTX held millions of dollars worth of dozens of other coins, the sale of which totaled several billion more dollars.

The bottom line: FTX can refund all users right now, with a small fee.

Sam and his supporters say this changes everything…

According to his family, Sam is in prison, wrongly labeled as someone who caused investors to lose billions. Now that the trial and sentencing is over, we learn that no one lost anything, and that they even got away with a small profit – it’s a completely different situation than the one he was sent to prison.

Sam, 32, is serving a 25-year sentence, his prime wasted – it’s a punishment designed for someone who caused countless people to lose their hard-earned money.

He will be 57 years old when he is released, if he survives prison, because according to his family, his “social awkwardness” places him in a difficult situation. high risk of becoming a victim of “extreme violence” from another inmate, mistaking Sam’s clumsiness for rudeness. His New York prison cellmate who held Sam during the trial says there were times when other inmates actually targeted him.

Before sentencing, the judge allowed some FTX users to share stories about how their lives were ruined…

At the time, the final result was still unknown. These users gave stories of their ruined lives, claiming that things like “decades of savings” were gone forever because of Sam’s actions.

These are the kinds of stories the judge heard just before sentencing Sam to 25 years in prison.

This makes you wonder: Would the punishment be different if these former FTX users only had stories about their funds being inaccessible, and then ultimately got it all back, with a small profit? Honestly, I find it hard to believe that wouldn’t be the case.

But maybe that shouldn’t change anything…

Let’s imagine the worst case scenario. Sam, like everyone else, can’t really predict the future. While its early investments in projects like Solana are now bringing in billions in profits, things could also have gone the other way.

Arguably he made smart investments that paid off, as he knew they would, so from his perspective no user funds were ever at risk. But there are just some things he couldn’t have known, no matter how much research he put into his decisions. For example, what would happen if Solana faced a massive hack? We’ve seen hacks ruin projects that had the potential to land in the top 10 tokens – no one can predict the discovery of a new security vulnerability.

If an unforeseen hack brought down Solana, it would be a story of FTX billions short of what they owe.

So even if things end without anyone losing any money, Sam has actually been gambling with users’ funds and putting them at risk of losing everything.

Speaking of which, while he was risking other people’s money, was he planning to share the rewards if it all worked out? Of course not. Sam quietly “borrowed” users’ funds without them knowing, he allegedly took the profits and returned what he borrowed as quietly as he took it.

We were all hurt by Sam’s actions…

I wasn’t an FTX user, but that didn’t matter because we all saw our wallets plunge the day FTX stopped trading, and those losses weren’t recovered for over a year. year.

But what many do not know is that the damage continues today. The reason FTX has so much money right now is because they dumped their massive coin supply into the market over the last year, often at times when the market was up, putting a end to this increase.

In fact, FTX is the reason we saw Bitcoin ETFs bring billions of new investments to the market, and the price of Bitcoin barely moved. Sam had purchased shares of Grayscale’s Bitcoin Trust which were automatically converted into shares of the Grayscale ETF. So when the ETF went live, FTX had 22 million of them – which they immediately dumped on the market.

But it was FTX’s Solana holdings that reached a value of billions while Sam was on trial – there’s no way of knowing what Solana’s price would be today if FTX hadn’t sold billions of dollars – but higher, of course, maybe much higher.

The fact is that Sam is a liar…

Ironically, his biggest broken promise is in print, regarding one of Sam’s strangest marketing decisions.

FTX condoms that say “Never break…even in big clearances” – ironically describing the exact conditions that would actually break FTX.

In conclusion…

This is all still coming to fruition, but when I think about the fact that Sam is in prison right now, it feels justified. He deserves punishment. Where I’m torn is whether in 15 or 20 years I’ll feel like there’s any justification for him still being there.

From a legal perspective, the end result of a crime usually makes a huge difference. For example, imagine someone who drives the wrong way on a highway because he is extremely drunk and manages not to kill anyone only because other drivers swerved to avoid him. Then imagine the same scenario, but in this one the drunk driver kills an innocent driver in a head-on collision. Even though we are fully aware that both of them literally made the exact same bad choices: one could end up in prison for a few months and the other for decades.

Ultimately, the choices Sam made led him here, which makes it hard to feel sorry for him now. So while I won’t campaign for #FreeSam, I also wouldn’t be angry to learn that Sam’s legal team was able to get the sentence re-evaluated and reduced by a few years.

If you were the judge presiding over the case, what, if anything, would you change given what you know today? We want to know – share your answer with us on @TheCryptoPress

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Author: Ross Davis
Silicon Valley Newsroom
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