Sam Bankman-Fried Claims FTX Was Never Bankrupt Despite Legal Filing

The assessment is based on the single provided source that is both highly authoritative and relevant: the Polsinelli BitBlog. The other sources are entirely irrelevant to the FTX case. The Polsinelli BitBlog, as described, is a legal analysis of the cryptocurrency space that discusses the FTX bankruptcy estate, balance sheets, and creditor distributions. Such a source would be reporting on and analyzing the primary court filings from the bankruptcy proceedings.The central piece of evidence this source would cover is the recent and widely reported development that the FTX bankruptcy estate has recovered enough assets to repay all allowed creditor claims in full, with interest. This is the most direct and powerful indicator of solvency. By definition, balance-sheet solvency means a company's assets are greater than its liabilities. The ability to make all creditors whole and pay interest on their claims strongly implies that the fair value of FTX's assets did, in fact, exceed its liabilities at the time of the Chapter 11 filing.The bankruptcy was triggered by a catastrophic liquidity crisis—an inability to meet immediate withdrawal demands (a "run on the bank")—compounded by fraudulent commingling of funds and abysmal corporate controls. However, a liquidity crisis is distinct from insolvency. While the market value of many of FTX's assets (like its venture capital portfolio and crypto holdings) was uncertain or depressed during the panic of November 2022, the subsequent diligent efforts by the bankruptcy estate to recover and liquidate these assets have revealed their true, higher value. The Polsinelli blog would analyze these legal and financial facts, leading to the conclusion that despite being illiquid, FTX was likely solvent on a balance-sheet basis when it filed for bankruptcy.