Liquidity Crisis or Governance Collapse? FTX's Solvency Debate Rages On

Sam Bankman-Fried, the disgraced founder of collapsed cryptocurrency exchange FTX, has launched a renewed legal and public relations campaign asserting that the platform was never insolvent at the time of its 2022 collapse. In a 14-page document released on October 31, 2025, SBF claims FTX faced a liquidity crisis rather than a balance-sheet shortfall, arguing that the exchange had sufficient assets to cover customer claims, according to a CryptoTimes report. The filing, posted on X, states that 98% of approved creditors have already received 120% of their claims, with total recoveries projected to reach 119%-143%, according to a Bitcoinist article.

The document shifts blame to FTX's post-collapse management and legal advisors, including Sullivan & Cromwell and interim CEO John J. Ray III, for mishandling asset liquidation and exacerbating losses, as Bitcoinist reports. SBF's team highlights that FTX's estate holds $14.6 billion in assets as of 2022, which have since appreciated to an estimated $136 billion, including stakes in Anthropic ($14.3 billion), Robinhood ($7.6 billion), and Solana ($12.4 billion), according to a Bitcoinsistemi post. Critics, however, dispute the narrative, noting that the value of many assets has surged post-2022, making retrospective solvency claims misleading, as Bitcoinist has noted. On-chain researcher ZachXBT argues in a Yahoo Finance piece that creditors lost opportunity costs by receiving payouts based on 2022 prices rather than current valuations.

SBF's claims have reignited debates over the root cause of FTX's failure. While his team insists the crisis was a "classic bank run," court records and prior testimony in criminal proceedings have highlighted governance failures and risky ties with Alameda Research, as reported by Bitcoinist. Legal experts also caution that bankruptcy costs and litigation risks could reduce net recoveries for creditors, a point similarly raised by Bitcoinist.

The political implications are equally significant. SBF's camp has intensified efforts to secure clemency from President Donald Trump, citing politically motivated prosecution under the Biden administration, according to a Benzinga article. Trump's recent pardons of Binance co-founder Changpeng Zhao and Silk Road founder Ross Ulbricht have raised the stakes, though Polymarket odds give SBF a 7% chance of clemency by year-end, as Benzinga noted.

For creditors, the dispute over FTX's solvency has practical consequences. Repayments are calculated using November 2022 valuations, potentially leaving users short if asset prices have since risen, a concern highlighted by Bitcoinist. While 98% of claims have been resolved, international creditors continue fighting for equal treatment, with a recent court ruling rejecting attempts to withhold payments in 49 countries, as CryptoTimes reported.

Regulators and legal observers remain divided. FTX's bankruptcy estate has not publicly responded to SBF's claims, but prior convictions on seven fraud counts and a 25-year prison sentence underscore the gravity of the case, as Yahoo Finance has documented. As the legal battle unfolds, the outcome could reshape how cryptocurrency collapses are managed, with competing narratives about responsibility and recovery setting precedents for future crises.