Sam Bankman-Fried Says His Biggest Mistake Was Handing FTX to New CEO Before Bankruptcy

Sam “SBF” Bankman-Fried, the disgraced founder of the collapsed cryptocurrency exchange FTX, says the “single biggest mistake” he made during the company’s downfall was handing control of the exchange to its current CEO, John J. Ray III, before bankruptcy proceedings began.

SBF Regrets Losing Chance to Save FTX

In a new interview published by Mother Jones, Bankman-Fried claimed that his decision to hand over FTX on November 11, 2022, prevented him from pursuing a last-minute investment that could have potentially saved the exchange.

“The single biggest mistake I made by far was handing the company over,” he said.
Moments after signing the papers, Bankman-Fried received a call about a possible external investment deal, but it was too late to reverse his decision.

Soon after taking control, John J. Ray III — a restructuring expert appointed as the new FTX CEO — filed for Chapter 11 bankruptcy protection and hired the law firm Sullivan & Cromwell (S&C) to manage the legal process.

From $32 Billion Empire to Collapse

Once valued at $32 billion, FTX collapsed in November 2022 after revelations that customer funds were being misused to cover losses at its sister trading firm, Alameda Research.
The scandal wiped out $8.9 billion in investor funds and led to one of the largest fraud cases in crypto history.

Bankman-Fried was arrested in the Bahamas on December 12, 2022, and extradited to the United States the following month. He was later convicted on seven felony charges and sentenced to 25 years in federal prison in 2024.

According to emails revealed in court filings, Sullivan & Cromwell attorneys had suggested Ray’s appointment two days before the bankruptcy.
An S&C lawyer, Andrew Dietderich, reportedly emailed SBF on November 9, 2022, proposing to hire Ray as a chief restructuring officer “in a possible Chapter 11” scenario.

In February 2024, a group of FTX creditors sued S&C, alleging the firm had aided and benefited from FTX’s fraud. However, the lawsuit was voluntarily dismissed in October 2024.

By June 2024, Sullivan & Cromwell had earned over $171.8 million in legal fees from the FTX bankruptcy case, according to Reuters.

FTX Creditors Await Remaining $8.7 Billion

Nearly three years after the collapse, FTX has made significant progress in repaying customers. The exchange began reimbursements in early 2024, with payouts of $1.2 billion in February, $5 billion in May, and $1.6 billion in September, totaling $7.8 billion so far.

The FTX estate now holds about $16.5 billion in recovered assets, meaning creditors are set to receive up to 118% of their original balances as of November 2022.

However, $8.7 billion in repayments are still pending as the bankruptcy process continues.

The downfall of FTX sent shockwaves through the cryptocurrency industry, triggering a chain reaction of bankruptcies and ushering in one of the longest bear markets in recent years.
After the exchange’s collapse, Bitcoin plunged to nearly $16,000, marking one of its lowest points in 2022.

Today, as Bitcoin trades above $124,000, the industry continues to recover from the damage left by FTX — a collapse still viewed as the defining scandal of the crypto era.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.