This video is brought to you by MooMoo a commission free brokerage app that will give you up to 15 free stocks when you open an account and make a qualifying deposit. Link in the description below against the advice of his lawyers, Sam Bakeman Freed gave numerous interviews to both the traditional and alternative media following the exposure of his multi-billion dollar fraud this past. November Two months later, he was arrested in the Bahamas extra died to the U.S and now faces the prospect of potentially spending the rest of his life. Behind Bars He is currently out on bail, living in his parents luxury California property until his trial which is scheduled for October.

Many analysts assumed that he would use his last 10 months as a free man to play as much League of Legends as possible as I Hear that internet speeds aren't great in federal prison. however, it appears that he had different ideas. On January 12th, he published a lengthy blog post where he effectively takes zero responsibility. He instead puts the blame on Binance CEO CZ as well as the bankruptcy liquidation team on this channel.

We've covered the FTX Saga in detail, including the numerous contradictory statements an apparent lies that SPF has told throughout the process. But everybody deserves a fair hearing. obviously in the court of law, but also in the court of public Opinion. So in this video, we'll take a deep dive into Spf's latest defense and what this could mean for his impending criminal trial.

We've put a link to SBS blog post in the description below if you want to read it for yourself, it mostly falls into three sections: Firstly, he explains why FTX and Alameda went bankrupt. Secondly, he explains why he did nothing wrong. and thirdly, given that he did nothing wrong, he finds other people to blame. He explains that going into 2022, Alameda had about 100 billion dollars of assets which were mostly invested in cryptocurrencies including serum Solana and of course, Ftx's native token Ftt.

SPF shares what he appears to be a screenshot from a Google Sheets showing Alameda's positions at the beginning of 2022. He said that Alameda borrowed 3 billion dollars from FTX which was collateralized by 28 and a half billion dollars that he had deposited into the exchange. This seemed to be a reasonable position as Alameda's assets would have to decrease by 9 in value for their account to go negative, and presumably FTS can liquidate the position long before this happens. As it turned out, Alameda CEO Caroline Ellison was not a very good investor.

She did not see the incoming Crypto Winter, so invested Alameda's funds mostly into speculative Altcoins. The 2022 Crypto Winter did not treat Alameda's portfolio kindly and it started decreasing in value precipitously. Instead of reducing Alameda's Altcoin positions, Ellison instead hedged the portfolio by shorting Bitcoin Ethereum and the QQQ NASDAQ 100 ETF. The thinking was, if the Crypto Winter continues, the profit from these short positions would offset the losses from their altcoins.

Of course, this was an incredibly dumb idea. Even a novice crypto Trader will tell you that during Crypto Winters all coins tend to decrease in value far faster than Bitcoin or technology stocks. All you would have to do is look back at what happened in 2017. the 28 year old self-described Harry Potter fan apparently did not understand is by October of 2022, the state of Alameda's balance sheet had deteriorated significantly.

The value of assets they held on FTX decreased by roughly 50 percent from 28 and a half billion dollars to 14.2 billion dollars. Despite the massive decline in Alameda's asset value, FTX increased its lending to Alameda from just 3 billion at the beginning of the year to 10 billion dollars by October. According to SPF, only 2 billion dollars of Alameda's assets were liquid. If you exclude the illiquid parts of Alameda's portfolio, the crypto hedge fund was 8 billion dollars underwater.

This begs the question: why did FTX increase its Landing to Alameda by such a large amount? Given the deteriorating state of their balance sheet according to Sam Bankman free, there is some sort of glitch in the dashboard that I use to monitor customer leverage positions. The dashboard significantly understated the size of Alameda's loan. Whether this was intentional or not, it is now almost indisputable that Alameda had an infinite credit card allowing it to draw on FTX customer deposits in November Binance CEO CZ announced that his firm would sell its 500 million dollar stake in the Ftt token, which caused the price to decline. This was a big problem for Alameda because they owned a significant against taking that same coin.

Cz's tweet was the straw that broke the camel's back. Given the precarious state of Alameda's balance sheet, there was a very high probability of it going bankrupt sooner or later. SPF accuses CZ of orchestrating a month-long PR campaign against FTX which ultimately led to the collapse. Of course, he provides no evidence of this.

Alameda went bankrupt and defaulted on its 10 billion dollar loan FTX had no way of paying back its customers so it froze its withdrawals and ultimately filed for bankruptcy. At this point, the situation looks pretty bad for SPF but he has a few points that he uses to defend himself. He points out that Financial firms go bankrupt all the time. after all, Lehman Brothers went bankrupt, but CEO Dick fold was never prosecuted.

Given the Federal Reserve's rate hikes and the resulting declines in various asset prices, it should be expected that many Financial firms will face liquidity issues. He specifically Compares FTX to the Swiss banking giant Credit Suisse Sam Beekman Freed says and I Quote: Credit Suisse fell nearly fifty percent this Autumn on the threat of a run on the bank at the end of the day. it's wrong. The bank fell short.

Ftx's didn't unquote. He appears to be referring to the roughly 50 decline in Credit Suisse's share price during the second half of 2022. What he's essentially saying is that given the macro environment, any Financial firm could collapse FTX just got unlucky. On closer inspection, Spf's comparison to Credit squeeze is so absurd that it's almost inconceivably that he actually believes it.

If every bank went bankrupt every time their share price declined by 50, there wouldn't be any banks left. Krita Swiss is a diversified company that engages in a wide variety of business activities. The part of their business that has the most analogous to FTX is their Prime brokerage unit which executes trades on behalf of its clients. They basically do the same thing that FDX did, but their clients trade stocks and bonds instead of crypto.

If I opened up a Credit Suisse account, those funds belong to me, not Credit Suisse Credit Suisse has no legal right to spend my funds on their own. It makes zero difference if Credit Suisse's share price declines by 50, 80, or even 100 percent. If Credit Suisse goes bankrupt, I will still be able to withdraw my money because Credit Suisse's creditors would have no claim on my assets. The only way their stock price would matter is if somebody within Credit Suisse decides to expropriate my funds.

and by Chris we stock without my consent. In practice, this almost never happens in the traditional financial industry because it is illegal and whoever is responsible would end up in jail. But this is apparently what happened at FTX in Alameda FTX customer funds were stolen and Alameda used them to speculate on Ftx's Native Ftt token. Spf's next line of defense is perhaps even more absurd than the previous one he says.

and I Quote: No funds were stolen Alameda Lost money due to a market crash. It was not adequately hedged for unquote. According to SPF, he has lost almost everything. A year ago, he had a net worth of 20 billion dollars.

Today he is down to his last one hundred thousand dollars. Eight billion dollars of FTX deposits are missing. If SPF stole the money, Surely he should be living in luxury, right? How is it the case that he's down to his last one hundred thousand dollars? Let's suppose you work as a bank teller. One day you decide to take one million dollars from The Vault and take it home with you.

You take this one million dollars to a casino and put it on the roulette wheel. If luck is on your side, that one million dollars turns into two million dollars. You return the one million dollars that you borrowed from the bank and you're left with a one million dollar profit. Conversely, if you lost the money, it was the bank's money, not yours.

It's a classic case of heads: I Win tails. You lose. In the eyes of the law, it doesn't matter what happens to the money after you steal it. either way, you stole it.

This is basically what happened at FTX with Alameda being the metaphorical: Casino billions of customer funds were inappropriately siphoned to Alameda which then used them to make risky crypto bets if the bets worked out Alameda which is owned by SPF keeps all of the upside if the bets go south FTX Customers hold the bag FTX Customers didn't sign up for this, making it a fraud FTX Customer money was stolen at this point. There's no doubt about it. The only question is: did SPF know about it? One of Sbf's legal defenses will likely be that he didn't know what was going on at his own companies. He substantiates this by saying that his work ethic decreased in 2022.

In 2019, he was working 18 hours per day. In 2022, this had decreased to just 12 hours. He did not clarify whether playing League of Legends is classified as working. Shortly after the fraud was exposed, SPF stepped down as CEO he was replaced by the bankruptcy expert John Ray who previously oversaw the Enron liquidation.

John Ray Hired a law firm called Sullivan and Cromwell to represent Ftx's victims in the bankruptcy processes. Interestingly, FTX Us's general counsel Ryan Miller used to work at Sullivan in Cromwell on November 11 right before stepping down as CEO Sam Bakeman Freed filed Chapter 11 bankruptcy proceedings for FDX Ftxus and Alameda. However, according to SPF, FTX Us is fully solvent and could honor all the customer withdrawals. Not Only was this the case, but he was on the verge of arranging a bailout plan from outside investors which could have saved the majority if not all of FTX International's depositors.

So why did he file for bankruptcy? according to SPF Sullivan and Cromwell and Ryan Miller conducted a sophisticated campaign to pressure him into the bankruptcy filing. They even went so far as to call SPF friends and family, pressuring them into turning pressure on SPF This harassment caused emotional damage to Spf's friends, some of whom came to him crying as the benevolent leader SPF was. He caved into the pressure and agreed to sign the Chapter 11 documents against his better judgment. This is because he couldn't stand the emotional damage being inflicted on his subordinates.

This makes him a truly honorable and selfless man indeed. I Hope you can hear my sarcasm here. This is a common tactic that SPF uses. He says I effed up to make it look like he's taking responsibility, but at the same time he comes up with the most bizarre excuses and blames everybody but himself.

He throws out a bunch of numbers and creates a convoluted story in an attempt to obfuscate the truth and confuse people and for some low. IQ Targets This deception strategy works. according to SPF There were billions of dollars lined up by outside investors who are willing to bail FTX out. However, Snc didn't entertain these ideas because they instead wanted to make legal fees from the bankruptcy process.

SPF has not disclosed who these interested investors were, so we have no way of knowing who they are or if they even existed. But we have two data points which put extreme doubt over Spf's claim: FTX is eight billion dollars in the hole. Thanks to Alameda's losses, most of Alameda's assets are likely worthless. For example, they spent three billion dollars to buy Binance's 20 Equity stake in FTX.

Now that FTX is bankrupt, this Equity stake is worthless. They also spent four billion dollars investing in hundreds of small crypto startups. Given the crypto winter, as well as Caroline Ellison's lack of investing Acumen, these Venture Capital Stakes are also likely worthless. And finally, they own large amounts of Ftt and other Altcoins which are now almost worthless.

Long story short, the 8 billion dollars that millimeters stole from FTX depositors has already been squandered. Even if they were willing to sell the company for just one dollar, any potential buyer would have to cough up 8 billion dollars before they could start operating the company again. It's hard to imagine that anyone would pay 8 billion dollars for a fraudulent crypto exchange whose brand value has been completely destroyed. As far as FTX Us John Ray says that the crypto assets of both FTX International and FTX Us were housed in the same database and were both ultimately controlled by Sam Bakman freed.

This makes it very difficult to tell which assets belong to International versus U.S customers. Thus, it is almost impossible to say whether or not FTX Us is solvent in November SPF called up CZ of Binance, asking them for a bailout within less than one day of due diligence, Binance pulled out of the deal for the same reasons we previously discussed: SPF claims that CZ was playing four-dimensional chess CZ Supposedly engaged in a due diligence process with no intention of following through purely as a sabotage tactic, but CZ wasn't the only one who contemplated a bailout. Anthony Scaramucci is a wealthy financier and crypto Bowl who has long been friends with SPF. Also in November Scaramucci flew down to the Bahamas to meet with SPF and see if there's any way he could help.

Within just one day, he realized that FTX was likely a fraud, so he left without making a deal. The fact that SPF thinks that he somehow could have saved his failed crypto Empire shows how delusional he's become. He's grasping at straws, desperately thinking of ways to defend himself. As upcoming trial, which is scheduled for October.

If I were advising him, I would say to play as much League of Legends as he can before the trial as it may very well be his last 10 months as a free man. All right guys, that wraps it up for this video. What do you think about Sam Bankman Free! Do you lend any credibility to his latest blog post? Let us know in the comments section below. As always, thank you so much for watching and we'll see you in the next one! Wall Street Millennial Signing out.

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