November 1, 2023 at 10:54 GMTModified date: November 1, 2023 at 10:54 GMT
November 1, 2023 at 10:54 GMT

Bankman-Fried concludes giving testimony in his fraud trial

On the defendant’s fourth and final day testifying in court, former crypto mogul Sam Bankman-Fried reiterated having a fuzzy memory throughout a major part of his time at FTX.

Bankman-Fried concludes giving testimony in his fraud trial

On the defendant’s fourth and final day testifying in the court, former cryptocurrency mogul Sam Bankman-Fried reiterated having a fuzzy memory throughout a major part of his time at FTX.

SBF was the last witness from both the defence and prosecution side on Tuesday, 31 October. A day before, he admitted to making both small and large mistakes while running his cryptocurrency exchange, leading to the harm of many due to the exchange’s collapse.

Even though he confessed to the significant oversight of not having a dedicated risk management team, Bankman-Fried denied defrauding anyone or being involved in the misappropriation of customer funds.

“Cosy relationship” with regulators

On Bankman-Fried’s second day in front of the jury, he was faced with a number of heavy questions at the hands of assistant US attorney Danielle Sassoon. One of them touched upon his close relationship with the government of the Bahamas, the country where FTX was based, and its prime minister, Philip Davis.

Tagging it as Bankman-Fried’s “cosy relationship” with Bahamian regulators, Sassoon explored how Davis and his wife had received tickets to a game at the FTX Arena in Miami, pulling up a message from a chat which exposed Bankman-Fried saying that they used FTX’s seats.

The FTX founder, on the other hand, had said that while he could remember the couple visiting a game but had no idea how they got the tickets or where they sat.

The attorney also brought attention to Bankman-Fried’s correspondence with a Bahamian regulator, offering to open up withdrawals to Bahamian customers. This offer was ultimately followed through on and took place while withdrawals were frozen for customers from other countries.

A fuzzy memory

In the later part of SBF’s cross examination, he was asked if he ever informed FTX customers that their funds were going to his sister company and the hedge fund he founded before starting FTX, Alameda Research. 

Continuing the same line of thought as before, the founder reiterated, “I don’t recall giving directions”.

When it came to the question of Alameda’s alleged spending of FTX customer assets, Bankman-Fried said he wouldn’t say the funds were ‘spent’ but rather ‘used. Sassoon extended this statement by asking if that meant they were being used to fund investments, to which SBF concurred.

He also depicted having a fuzzy memory about quite a lot of details of the last few years. A key point of questioning here was what he said to former FTX chief technology officer, Gary Wang and former FTX director of engineering, Nishad Singh, when he got to know about the $8 billion that had gone missing as the result of a computer bug.

Bankman-Fried replied saying that they told him they were busy and that he should stop asking questions. Sassoon countered this by saying, “So, it’s your testimony that your supervisees told you to stop asking questions?”. 

Talking about the eventual collapse of the crypto exchange, which was once valued at $32 billion, an X (formerly Twitter) thread from 7 Nov 2022 was introduced by the attorney. Bankman-Fried had tweeted this a few days before FTX filed for bankruptcy, assuring his users that the “assets are fine.” 

The former CEO defended the same saying that this was technically accurate, because he believed Alameda still had enough money on hand to refund FTX customer deposits.

Extending on this, Sassoon asked about FTX’s token, FTT, which formed a large portion of Alameda’s balance sheet. Challenging him that by November 2022, he would have known that FTT was illiquid, SBF responded, “I don’t think I would’ve said that”. 

A key piece of this claim was then brought on by the attorney, where she pulled out a text from a group chat on Signal messaging app which included former Alameda CEO Caroline Ellison and Singh. Here, SBF told his colleagues that if they sold their FTT, “there wouldn’t be a huge amount of liquidity”, meaning it wasn’t worth nearly as much as Alameda accounted for. 

What’s next?

Tuesday saw Bankman-Fried giving clarifications to the answers he gave to the government’s questions previously. It now depends on the jury to decide whether the FTX founder is guilty for the charges he is accounted for in the trial.

There will be closing arguments on Wednesday, which is expected to take around a day. This will be followed by the jury’s deliberation which could easily take several days given the complexity of this case. 

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