Sam Bankman-Fried denies defrauding FTX users at trial
The jury overseeing the criminal trial of Sam “SBF” Bankman-Fried listened to the former FTX CEO’s testimony for the first time, which involved largely denying knowledge of fraudulent activities at the crypto exchange.
According to reports from the New York courtroom on Oct. 27, Bankman-Fried suggested Wang, the former chief technology officer at FTX, had been partly responsible for creating the “allow negative” button for Alameda Research. The feature gave the crypto hedge fund the ability to trade more funds than it had available.
“At the time, I wasn’t entirely sure what was happened,” Bankman-Fried reportedly said regarding Alameda’s line of credit. “I thought the funds were being held in a bank account, or sent to FTX in stablecoins. If Alameda was keeping it, I figured it would be reflected as a negative number on FTX.”
On former Alameda co-CEOs Caroline Ellison and Sam Trabucco, Bankman-Fried reportedly said they were “a good team” but criticized Ellison’s experience:
Bankman-Fried’s claims partly or directly contradict the testimonies offered by Wang and Ellison. Wang took the stand on Oct. 6, saying Bankman-Fried had ordered him and former FTX engineering director Nishad Singh to implement the “allow negative” feature in 2019. Ellison testified that she had wanted to step down as CEO of Alameda, but SBF asked her to stay, citing the risk of rumors about the firm’s financial health.
In earlier testimony, the former FTX CEO reportedly said he knew “basically nothing” about crypto when launching Alameda. Defense lawyer Mark Cohen said he planned to finish his questioning of Bankman-Fried on Oct. 30. After that, attorneys with the Justice Department will have the opportunity for cross-examination in front of the jury.
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