Sam Bankman-Fried Claims To Be Bankrupt And Committed No Fraud

Sam Bankman Fried is one of the most famous entrepreneurs who rose to fame as quickly as the temperature of boiling water. However, over time he has been reduced from riches to rags owing to his failed investment decisions. He was the owner and founder of FTX, which was a famous cryptocurrency exchange. 

But now this exchange is no longer operational. It has witnessed excessive losses and now it is charged with criminal liability for defrauding creditors who have lost billions of dollars on this platform. Sam has been accused of fraud and undertaking illegal transactions through this platform. 

A case has also been filed against him in the bankruptcy court of The United States of America. It is important to consider the repercussions of admission into bankruptcy. There is a possibility that the entrepreneur might face Civil and criminal charges. But the recent interview with Sam has reduced a different aspect of the problem. 

What Caused The Bankruptcy? 

It was in the year 2015 when Sam removed 10 billion dollars secretly from the company. The funds have been moved to Almada Research. Apart from this around 1 billion dollars from the customers’ fund has also vanished under unknown circumstances and the same has not even been reported in the financial statements of the company.

This accusation was denied on the ground that the money was transferred for correcting some internal statistics. Internal labeling was one of the most important reasons for the change. 

After all the strangers took place the traders lost confidence in the platform and hence pulled out six billion dollars that had been of interest to them. It was basically responsible for the destabilization of the platform. In the year of 2019, the company filed for bankruptcy.

The charges of fraud were continuously levied against the board of this company. In light of all of these changes, Sam stepped down from the position of chief executive officer of the company.

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What Is The Recent Position? 

The lawyers of the company had strictly advised against making any kind of public statement before the bankruptcy proceedings commenced. But Sam has given an exclusive interview in order to clarify that he never had the intention to defraud the creditors.

It was all due to unforeseen circumstances that his company had basically failed. His intention was always to promote the profit of the traders but it all went in vain. 

He also stated that there is no possibility to face any kind of criminal charges because he has not committed any such crime even under bankruptcy law. This statement is not in a position to promote any kind of confidence of the traders in the company.

He still remembered the time when his net worth was calculated to be around 26 billion dollars and today it is less than 1 million dollars. 

Issues

This clarification is definitely not helpful in the proceeding but it might convey his intention to the public at large. The company has also lost all the permissions from the security exchange in order to continue trading activities in cryptocurrency.

After the bankruptcy proceedings are over the company would be taken over by a conglomerate or would be dissolved on an immediate basis. The future of the company depends upon the willingness of the competitors to take over this enterprise and give it a fresh start. 

Final Words

It can be concluded that financial decisions play a very important role in the growth of the organization. But they have to be taken in light of the unforeseen circumstances so that the investors do not face unwanted losses in the future of the company.