Practically a month after his fraud trial started, former cryptocurrency mogul Sam Bankman Fried took the witness stand in his personal protection in a dangerous transfer that uncovered him to prosecution investigations.
Bankman Fried, founding father of cryptocurrency change FTX, spent three days answering questions in entrance of the jury, in an 11-hour effort to counter detailed testimony in opposition to him from members of his interior circle.
He’s charged with seven counts of wire fraud and cash laundering conspiracy for his position in FTX’s multibillion-dollar collapse in 2022 and has pleaded not responsible. His firm is in the midst of chapter proceedings.
Listed below are six key moments from Bankman-Fried’s testimony.
He denied the central cost: Defrauding FTX clients of $10one billion
Prosecutors allege that Bankman-Fried “embezzled and misappropriated” billions of {dollars} to advance his personal ends — costly actual property, celeb endorsements, non-public jets, political contributions — and to make up for enormous price range shortfalls at Alameda Analysis, FTX’s sister hedge fund.
Carolyn Ellison, the previous CEO of Alameda and Bankman-Fried’s former girlfriend, testified that she dedicated monetary crimes on the path of Bankman-Fried. Gary Wang, co-founder of FTX, and Nishad Singh, the change’s engineering director, gave comparable testimony. Ellison, Wang and Singh have pleaded responsible to fraud and conspiracy fees.
Nonetheless, Bankman-Fried mentioned he didn’t know that FTX consumer funds had been used illegally even earlier than his $32 billion firm collapsed. He mentioned he didn’t bear in mind ordering his staff to spend his shoppers’ cash on luxurious properties and different extravagant objects. He repeated 3 times: “I don’t bear in mind giving any instructions” in response to the prosecution’s questions.
His protection lawyer, Mark Cohen, requested on Friday: “Did you defraud anybody?”
“No, I did not try this,” Bankman-Fried mentioned.
“Did you are taking buyer cash?” Cohen requested.
“No,” mentioned Bankman-Fried.
Nonetheless, Bankman-Fried admitted to creating “massive errors” and “massive errors” corresponding to by no means hiring a danger administration workforce.
“Did FTX at the moment have a danger administration division?” Cohen requested.
“We positively ought to have performed that,” he mentioned on stage.
He mentioned his public persona was not an act
Prosecutors pressed Bankman-Fried about his private model, arguing that the founder’s eccentric, tech-savvy persona was half of a bigger hoax. Ellison testified earlier within the trial that he was.
Bankman-Fried denied that his unkempt hair and modest shorts had been a part of a persona rigorously designed to draw shoppers and buyers.
“You testified, did not you, that you just did not reduce your hair since you had been busy and lazy?” Prosecutor Daniel Sasson requested Bankman-Fried.
“That sounds about proper,” he replied.
He requested Sassoon whether or not he advised a colleague, as The New York Occasions reported: “‘I truthfully assume chopping my hair represents a adverse worth (worth) for me.’ I feel it’s vital that folks assume I look loopy.
“I do not assume I mentioned it that approach,” replied Bankman Fred.
“Mr. Bankman-Fried, do you bear in mind this text from the New York Occasions?” Sassoon pressed, referring to the article with the remark “Loopy.”
“Vaguely,” mentioned Bankman Fred.
He additionally requested Sassoon if, throughout a visit to the Center East to draw buyers, he had mentioned the shirt and shorts had been “a part of your model.”
“Do you bear in mind saying that?” she requested.
“I do not do not forget that,” he mentioned.
After selling the e-newsletter
He mentioned he knew “mainly nothing” about cryptocurrencies when he began FTX
Bankman-Fried mentioned he did not know “mainly something” about cryptocurrencies when he began FTX, it was simply “issues you may commerce.”
“I had completely no concept how they labored,” he advised his lawyer on the stand.
“We thought we would be capable of construct the most effective product available on the market” and push the cryptocurrency ecosystem ahead, he added.
Nonetheless, he mentioned issues didn’t prove that approach: “It turned out mainly the other. Lots of people bought damage – clients and staff – and the corporate ended up going bankrupt.”
He blamed Carolyn Ellison and Binance for the FTX collapse
Bankman-Fried’s attorneys have singled out Ellison because the architect of the FTX collapse. Of their line of questioning, they centered on Bankman-Fried’s request to Ellison to hedge Alameda positions, which Bankman-Fried mentioned she didn’t comply with.
Cohen, Bankman-Fried’s lawyer, appeared intent on exhibiting that the businessman had performed every part he might to make FTX higher and safer. Cohen and Bankman-Fried mentioned hedging, particularly their declare that Ellison didn’t take positions that may insulate Alameda from the dramatic crypto collapse within the spring of 2022, which put the hedge fund in danger.
“I referred to as a gathering with Caroline and advised her I used to be very involved about Alameda,” Bankman-Fried testified. “I mentioned I used to be very involved that it had fallen from $40 billion to $10 billion over the earlier 12 months and, so far as I might inform, the danger of a market collapse had not been hedged.”
He mentioned he was involved that if the market fell once more, “Alameda may turn out to be bancrupt.”
There was one other assembly on the identical matter in September of that 12 months, the place, Freed Bankman mentioned, he requested about Alameda’s lack of hedging.
“what did she say?” Cohen requested.
“I began crying,” Bankman-Fried mentioned. “I agreed that Alameda ought to have hedged.” Ellison admitted she mustn’t have made among the investments and “supplied to step apart,” in line with Bankman-Fried.
The protection additionally recommended that the inventory change’s collapse was the fault of Binance, one in all FTX’s rivals. Binance, the world’s largest cryptocurrency change, offloaded greater than $500 million of FTT — FTX’s cryptocurrency — days after CoinDesk broke the information that Alameda Analysis’s holding of the token places it in danger.
I’ve caught with it ‘Math nerd‘Defence
Cohen tried to again up Bankman-Fried’s declare that the cryptocurrency founder was hopelessly overburdened and due to this fact could not have recognized how incorrect issues had been going at FTX. Cohen famous how FTX went from thousands and thousands in single-digit every day buying and selling in 2019 to tens of billions in 2022.
“Once you began FTX in 2019, did you anticipate this stage of progress?” Cohen requested.
“Completely not,” Bankman-Fried mentioned.
“What number of emails do you obtain on a typical day?” Cohen requested.
“Oh, hundreds,” Bankman Fred mentioned. “I would shoot for an inbox of 60,000. Sixty thousand unread messages could be slightly decrease. I do not normally succeed.”
He mentioned “I do not bear in mind” lots of the issues he mentioned on the report
Bankman Fred mentioned “I do not bear in mind” greater than 100 instances on the witness stand in response to questioning. The prosecution confronted him dozens of instances with recorded statements he made or with a recorded interview by which he seems saying precisely what was requested of him. The repeated slogan may damage him within the eyes of the jury.
