The current CEO of FTX, John Ray, has disputed the former CEO Sam Bank Frieds assertion that there was “zero” harm to customers during the platforms collapse in 2022, labeling the claim as reckless and false.

Rays criticism follows Bankman-Frieds conviction in November for embezzling $8 billion from FTX customers.

John Ray Challenges SBFs Defense Strategy

The former CEOs defense strategy has relied heavily on the notion that since there might be a chance of customer reimbursement through bankruptcy proceedings, his actions should not be considered theft.

“I can assure the Court that each of these statements is categorically, callously, and demonstrably false,” Ray wrote in a Wednesday filing. “Customers will never be in the same position they would have been had they not crossed paths with Mr. Bankman-Fried and his so-called brand of altruism.”

He also stated that the recovery of funds for FTX customers is not a testament to SBFs innocence but rather the result of diligent efforts by professionals managing the bankruptcy estate.

Rays statements come ahead of SBFs sentencing scheduled for March 28, where he faces the prospect of a lengthy prison term.  Bankman-Frieds defense team opposed the prosecutors suggested 40 to 50-year prison term.

Ray Challenges Recovery Claims

SBF, who pleaded not guilty to seven fraud and conspiracy counts, has maintained his innocence, claiming that he never intended to steal funds despite acknowledging mistakes in running FTX.

The memorandum distorts reality to support its precious loss narrative and casts Sam as a depraved super-villain, Mukasey wrote on Monday, referring to the sentencing proposal.

He had also previously stated that FTX customers were expected to be fully compensated through bankruptcy proceedings and that he had worked diligently to recover funds after the exchanges collapse.

Ray has disputed this, stating that SBFs assertion about full value restoration overlooks important details, pointing out that individuals who held Bitcoin in FTX at the time of collapse would receive a recovered value significantly lower, by 400%, than current rates. This discrepancy arises because the distribution value is determined based on the petition date, failing to account for the increase in price values since then.

He also stated that due to covert borrowing by Alameda under SBFs direction, the account statements were inaccurate, as the FTX debtors did not possess the cryptocurrency customers believed was held in their accounts as of the petition date.