SBF’s parents: “There was no loss of customer funds”… Liability dispute persists despite FTX payouts

The parents of Sam Bankman-Fried (SBF), founder of the bankrupt crypto exchange FTX, pushed back head-on against his guilty verdict in a public interview.

According to CoinDesk on the 23rd (local time), Barbara Fried and Joseph Bankman said in a CNN interview that “customer funds were always there, and the company held sufficient assets,” adding that “as a result, investors did not suffer losses.”

The remarks come as the FTX bankruptcy estate is set to carry out a fourth round of distributions worth about $2.2 billion by the end of this month, at a time when total recoveries are expected to reach roughly $10 billion. Some investor groups are reportedly receiving distributions of more than 100% of principal, up to around 120%.

However, the payouts are structured to be made in U.S. dollars converted at prices as of the November 2022 bankruptcy filing. At the time, Bitcoin was around $16,800; factoring in subsequent price gains, critics argue that losses remain when measured on an actual asset-value basis.

In fact, creditors have been disputing the claim, saying that “investors have not been made whole.”

SBF’s parents also described the transfer of FTX customer funds to affiliate Alameda Research as “a typical borrowing transaction.” But such commingling of funds has been identified as a central issue that has become a regulatory target in major countries in the wake of the FTX collapse.

Meanwhile, SBF is currently serving a 25-year prison sentence, with an appeal under way. While his parents claim the investigation was driven by political judgment, President Donald Trump has previously expressed a negative view on the possibility of a pardon.