Does a $16.5 Billion Surplus Claim Change the FTX Story?
In early February 2026 Sam Bankman-Fried the former CEO of the collapsed cryptocurrency exchange FTX filed a dramatic motion in federal court seeking a new trial in his long-running legal battles. His request rests on a bold claim that challenges a core narrative of the 2023 criminal case against him that FTX was insolvent and defrauded billions of customers. Instead Bankman-Fried asserts that the exchange was not insolvent at the time of its collapse and in fact had a positive net asset value of $16.5 billion as of November 2022 when it filed for bankruptcy. This new motion has reignited controversy around the FTX collapse the fairness of the original trial and the broader meaning of solvency fraud and accountability in the world of cryptocurrency.
For readers who watched the spectacular rise and fall of FTX or who follow developments in cryptocurrency regulation and law the motion raises challenging questions about financial reality versus courtroom narrative and whether a different account of FTX’s financial health could undercut the convictions that followed its disastrous collapse.
The FTX Collapse a Brief Background
To understand why Bankman-Fried’s motion matters it is important to revisit the arc of FTX itself a company once heralded as the future of cryptocurrency markets. Founded in 2019 by Sam Bankman-Fried the exchange quickly became one of the largest digital asset trading platforms in the world providing users with an easy way to trade Bitcoin Ethereum and many other tokens. At its peak FTX processed massive trading volumes and drew high profile investors and venture capital backing. However cracks began to show in late 2022 when revelations about risky internal practices and conflicts of interest came to light.
FTX’s affiliated hedge fund Alameda Research held extensive token positions and complex financial arrangements with the exchange itself. In November 2022 a sudden spike in withdrawals triggered a liquidity crisis as customers struggled to get their money out. The exchange soon collapsed entering bankruptcy on November 11 2022 after being unable to meet withdrawal demands. Investigations found that billions of dollars of customer funds had been misused or commingled with Alameda Research operations leaving an estimated $8 billion hole in the company’s accounts. Sam Bankman-Fried resigned as CEO and was subsequently arrested extradited to the United States and charged with fraud conspiracy and other offenses.
In November 2023 after a high profile trial in Manhattan federal court a jury found Bankman-Fried guilty on seven counts related to defrauding FTX customers lenders and investors. In March 2024 the judge sentenced him to 25 years in prison ordering forfeiture of roughly $11 billion. The prosecution’s case hinged on evidence that customer deposits were used without authorization to fund risky trades political donations and other Alameda activities and that investors were misled about the company’s financial health.
The New Motion and its Core Claim
On February 10 2026 Bankman-Fried filed a motion under Rule 33 of the Federal Rules of Criminal Procedure seeking a new trial. This legal rule allows a court to grant a retrial if newly discovered evidence surfaces or if there were fundamental errors in the original trial that prejudice the defendant’s right to a fair outcome. Bankman-Fried’s motion contends both that key witnesses were improperly silenced during the 2023 trial and that crucial financial evidence was overlooked or mischaracterized.
At the heart of the argument is the claim that FTX actually held a $16.5 billion positive net asset value at the time of its bankruptcy filing in November 2022. If proven true this figure would suggest that the company was not insolvent in the strict accounting sense that prosecutors depicted. Instead the motion argues that FTX suffered primarily from a liquidity mismatch where assets existed to cover liabilities in a static balance sheet view but could not be quickly converted into cash to meet the demands of panicked customers during the run on the exchange.
Bankman Fried also alleges that testimony from former executives such as Daniel Chapsky and Ryan Salame who did not appear at his original trial could have contradicted prosecutors’ assertions about FTX’s financial condition and losses. The motion claims that these individuals were pressured or intimidated into avoiding participation and that their potential testimony might support the defense’s narrative about solvency and asset distribution.
What $16.5 Billion Solvency Means and Why It May Not Be Enough
The notion that FTX had a $16.5 billion surplus in 2022 has been widely discussed in legal filings and commentary, but experts caution that this figure does not automatically erase the findings of fraud or the basis for Bankman-Fried’s convictions. Solvency in accounting terms simply means that a company’s assets exceed its liabilities at a specific point in time. It does not necessarily speak to liquidity the ability to meet immediate obligations or whether assets were correctly valued or free from encumbrances.
FTX’s bankruptcy proceedings have involved the painstaking process of recovering assets selling illiquid holdings and distributing funds to creditors. Bankruptcy law determines claimant entitlements based on values at the petition date and does not always correspond to the amounts users thought they held or to market price movements after that date. Some bankruptcy plans, for example, contemplate distributions exceeding 100 per cent of petition date values in dollar terms but not restitution of the original assets or their post collapse growth.
More importantly a positive net asset value does not change the fact that enormous amounts of customer funds were misused without proper authorization or disclosure. Fraud law and criminal liability focus on misconduct and misrepresentation as of the time the events occurred not on whether assets eventually end up covering liabilities in a retrospective accounting sense. Even if FTX’s estate ultimately recovers enough assets to repay creditors customers may still have been defrauded and governance failures may still be serious violations of law.
Financial solvency also depends on valuation assumptions. Illiquid assets such as venture investments or stakes in untradeable companies may have been counted at optimistic valuations that later proved difficult to monetize. It is one thing to list assets on a balance sheet and quite another to turn them into liquid funds available to satisfy customer withdrawals under stress conditions.
Solvency Versus Misconduct Why the Court Matters
Bankman-Fried’s motion also accuses prosecutors of misrepresenting key evidence and silencing potential defense witnesses. He claims that testimony from individuals like Chapsky and Salame could have altered the narrative around FTX’s finances or contradicted claims about how customer funds were handled. Questions about witness intimidation prosecutorial conduct and due process are serious legal issues that could affect the fairness of the original trial if substantiated.
Bankman Fried further seeks the recusal of Judge Lewis Kaplan who presided over the 2023 trial arguing that bias or trial management contributed to an unfair outcome. Motions of this nature are rare and face a high standard in federal courts. Judges typically grant retrials only when new evidence is compelling and likely to change the outcome or when clear trial errors undermine confidence in the verdict.
Legal analysts note that while Bankman-Fried’s motion engages complex arguments about accounting interpretations and witness availability it remains a long shot. Courts differentiate between bankruptcy law’s assessment of creditor recoveries and criminal law’s evaluation of whether fraud occurred. Convictions are based on conduct intent and representation at the time the offense took place rather than on later asset recoveries.
Implications for the Crypto Industry
The FTX saga has already reshaped how regulators investors and users think about cryptocurrency exchange risk and oversight. The sheer scale of the collapse and the legal fallout have underscored the importance of transparent accounting operational controls segregation of customer funds and robust governance. Bankman-Fried’s motion highlights the gap between solvency and liquidity and raises questions about whether exchanges should be mandated to disclose more real-time information about their financial status and risk exposures.
If Bankman-Fried were to secure a new trial on the basis of solvency arguments it could have a wide impact on how future crypto exchange failures are litigated and regulated. It might encourage calls for clearer standards around proof-of-reserves and proof of liabilities and could accelerate efforts to explore decentralized custody options where users retain direct control of their assets.
However critics warn that focusing narrowly on a claim of a surplus might obscure the deeper issues of governance risk management and accountability that led to FTX’s downfall and its effect on customers markets and the wider crypto ecosystem. Even if assets exceed liabilities in theory the failure to operate within legal and ethical boundaries remains central to the case against Bankman-Fried.
What Happens Next
Bankman-Fried’s motion for a new trial is now under review by the federal court in Manhattan. The judge may schedule hearings to consider whether the evidence and arguments presented justify opening a new trial or modifying the original verdict. Meanwhile Bankman Fried’s separate appeal before the U.S. Court of Appeals for the Second Circuit continues to work its way through the appellate process raising additional questions about trial fairness sentencing and evidentiary rulings.
Observers will be watching closely to see whether the motion leads to any changes in the legal proceedings or whether it simply serves as another chapter in the long aftermath of the FTX collapse. Regardless of its outcome the motion underscores the complexity of using legal strategies to challenge high profile fraud convictions and highlights how narratives about financial failure and criminal liability can diverge and evolve over time.
A Defining Moment in Crypto History
The FTX collapse and its legal consequences remain one of the defining events of the cryptocurrency era. What began as a meteoric rise to crypto prominence culminating in a catastrophic crash and a dramatic courtroom battle has become a cautionary tale about risk trust and responsibility in a rapidly evolving digital economy. Sam Bankman-Fried’s request for a new trial revives questions about what really happened at one of the world’s largest crypto exchanges and whether justice has been fully served. As the crypto industry matures regulators and users alike will continue to grapple with how to balance innovation with accountability and how to prevent another FTX-scale disaster
