Former FTX CEO Sam Bankman-Fried has described his decision to hand control of the exchange to John J. Ray III in November 2022 as his “single biggest mistake,” claiming it cost him a last-minute chance to rescue the collapsed platform.
In a recent interview with Mother Jones, the 33-year-old former billionaire said he received a call about a potential investment “minutes after” signing over control, but it was too late to reverse the move. Bankman-Fried argued that if he had retained leadership, the funding could have saved FTX from declaring bankruptcy.
Bankman-Fried is currently serving a 25-year sentence for orchestrating one of the largest financial frauds in history. Prosecutors proved he misappropriated billions in user deposits to cover trading losses at Alameda Research, FTX’s sister firm, leading to an $8.9 billion shortfall. John J. Ray III took over as CEO and filed for Chapter 11 bankruptcy on November 11, 2022, the same day Bankman-Fried stepped down.
The remarks reignited friction between FTX’s former leadership and its restructuring team. Ray and his lawyers accuse SBF of reckless mismanagement, while he insists his collapse was due to “mistimed decisions,” not fraud.
FTX Lawsuit and $1.6B repayment show case progression
The resurfaced comments come as the FTX Recovery Trust files a $1.15 billion lawsuit against Genesis Digital Assets, alleging that Sam Bankman-Fried used customer funds to make an overpriced investment in the Kazakhstan-based bitcoin mining firm. The suit claims the money, funneled through Alameda Research, enriched GDA’s founders while leaving FTX users empty-handed.
Legal experts say the case highlights a broader pattern of opaque deals that fueled FTX’s collapse, describing it as “a systemic misuse of customer money hidden behind complex offshore structures.”
These revelations align with FTX’s ongoing efforts to return funds to victims. On September 20, the FTX Trust confirmed plans to distribute $1.6 billion to creditors by the end of this month, the largest recovery round to date.
Alongside the Genesis lawsuit, the move signals a renewed push to close FTX’s $8 billion gap. For Bankman-Fried, the irony is stark: his own choice, not a lost investor, may have sealed FTX’s collapse.
Also read: FTX to Distribute $1.6B to Creditors by End of September
