Sam Bankman-Fried stated in exclusive prison interviews that handing FTX to CEO John Ray III was “the single biggest mistake I made by far,” claiming he signed over control at 4:24 am on November 11, 2022, under extreme pressure from Sullivan & Cromwell and company advisers.
According to a report from Mother Jones, the convicted FTX founder maintains that he never defrauded anyone and that the company was never bankrupt, despite a jury finding him guilty of seven counts of fraud and money laundering in November 2023.
Bankman-Fried is serving a 25-year sentence at Federal Correctional Institution Terminal Island in Los Angeles and has been ordered to pay $11 billion in restitution.
His parents, Stanford law scholars Joe Bankman and Barbara Fried, are preparing to appeal his conviction, arguing that Sullivan & Cromwell wrestled FTX away from him, installed Ray, and profited handsomely while playing a critical role in his imprisonment.
According to the report, the law firm has billed nearly $250 million in legal fees throughout the bankruptcy process, while Ray will receive a $30 million bonus in addition to his $1,575 hourly rate and a $3 million completion fee.
Total bankruptcy costs are expected to exceed $1 billion, making it one of the most expensive in U.S. history.
John Ray has called SBF’s claims about FTX’s solvency “categorically, callously, and demonstrably false,” stating he and Sullivan & Cromwell salvaged billions from the wreckage to repay customers.
By last October, Ray had recovered at least $16 billion, with most creditors expected to receive 100% of their November 2022 account values plus interest.
Sullivan & Cromwell’s Role Draws Scrutiny From Senators and Bankruptcy Experts
Sullivan & Cromwell had represented FTX on at least 20 occasions since 2021, earning over $8.5 million in fees before the collapse.
Some attorneys from the firm had joined FTX’s in-house legal staff, including Ryne Miller, General Counsel of FTX.US, who was a former staff attorney at the Commodity Futures Trading Commission.
Days before the bankruptcy filing, Sullivan & Cromwell attorneys consulted with Miller. They reported accounting concerns to the U.S. Attorney’s office for the Southern District of New York, the SEC, and the CFTC.
SBF claims these discussions occurred without his knowledge.
Ray’s team later stated that Sullivan & Cromwell’s pre-bankruptcy outreach was of “critical importance to the speed with which federal prosecutors have been able to charge and arrest Mr. Bankman-Fried.”
Bipartisan senators, including Elizabeth Warren and Thom Tillis, wrote to the bankruptcy judge in January 2023, questioning Ray’s hiring of Sullivan & Cromwell, given its extensive history with FTX.
FTX's native token FTT soared after a new X post from Sam Bankman-Fried stirred speculation on Tuesday night.#SBF #FTThttps://t.co/vak775fPZi
— Cryptonews.com (@cryptonews) September 24, 2025
The senators noted the firm advised FTX for years, leading to its collapse, while claiming to be “disinterested” in conducting the fraud investigation.
Temple University bankruptcy expert Jonathan Lipson filed a court brief supporting the appointment of a special examiner to investigate whether Sullivan & Cromwell violated ethical duties.
Lipson questioned whether the firm violated ethics by promising SBF a reorganization role “while simultaneously seeking to induce his prosecution.”
An independent examiner was eventually appointed over Sullivan & Cromwell’s objections, though the mandate was limited to compiling and summarizing completed investigations rather than conducting new interviews or reviewing primary documents.
The examiner determined Sullivan & Cromwell’s past work did not disqualify it from representing FTX through Chapter 11.
Creditors Fight Bankruptcy Fees While Bitcoin Holdings Surge 600%
Sunil Kavuri, a former adviser at Deutsche Bank and Morgan Stanley, had $2 million in crypto assets frozen on FTX when the exchange collapsed.
He launched a class-action suit against celebrity spokespeople, including Tom Brady, Shaquille O’Neal, and Shohei Ohtani, with O’Neal settling for $1.8 million in May.
Kavuri became a self-appointed champion for creditors, building an online community that tracks bankruptcy developments.
Italian creditor Lidia Favario, who lost her savings from a car crash settlement, filed numerous objections targeting Sullivan & Cromwell’s fees, noting one professional spent over $1,000 on taxis in a single week.
Creditors argued that they should recover digital assets at their current values rather than the November 2022 frozen cash values.
An account containing $50,000 in bitcoin would now be worth around $350,000, representing approximately 600% appreciation.
SBF maintains that FTX had nearly $15 billion in net assets when it collapsed and estimates the estate would be worth at least $119 billion today if the bankruptcy team had done nothing.
His legal team plans to center his appeal on questions surrounding FTX’s solvency, arguing that the jury never saw evidence that the company had sufficient assets to repay its customers.
Ray sold FTX-owned LedgerX to investors, including Zach Dexter, the FTX.US chief who urged SBF to step aside, for $50 million after FTX paid nearly $300 million to acquire it in 2021.
Sullivan & Cromwell’s Andrew Dietderich called LedgerX a “horrible investment,” though the firm had helped broker the original deal and billed $1.5 million for that work.
FTX’s stake in Anthropic netted more than $1.3 billion during the bankruptcy. By late September, the FTX Estate had distributed nearly $8 billion to creditors.
Oral arguments for Bankman-Fried’s appeal are scheduled for November 4 at the U.S. Court of Appeals for the Second Circuit in New York. However, federal acquittal rates remain historically low at less than 1%.
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