SBF: FTX was never truly insolvent; the real issue was the liquidity crunch at the time of filing for bankruptcy.

On October 31, FTX founder Sam Bankman-Fried (SBF) released a report titled “FTX: Where Did The Money Go?” indicating that customers of the cryptocurrency trading platform FTX are expected to receive a repayment of 119% to 143% of their principal in USD, meaning that all creditors will “fully recover” their funds. FTX was never truly insolvent, as funds were still sufficient at the time of bankruptcy. Data shows that when FTX filed for bankruptcy in November 2022, its total assets were approximately $15 billion, including cash, crypto assets, investments, and real estate, enough to cover about $8 billion in customer debt. The fundamental issue FTX faced at that time was liquidity issues rather than asset shortfalls. If not for the forced takeover, the company’s original system might have restored withdrawals and operations within that year. Since the bankruptcy, legal and advisory fees have accumulated to over $1 billion. More importantly, customer repayments are calculated in USD based on cryptocurrency prices in November 2022; at that time, Bitcoin was around $17,000, while the current price has exceeded $100,000. Although customers nominally received “excess” compensation, they actually missed out on two years of market gains. If FTX had not gone bankrupt and had held onto its original assets until now, its overall asset value would exceed $130 billion, with shareholder equity reaching $110 billion. In contrast, current shareholders can only recover about 10% of their invested capital, and the company's valuation has nearly dropped to zero.