FTX’s Former CEO Emphasizes Reliance on Lawyers During Court Testimony
During his court appearance on October 26, 2023, Sam Bankman-Fried (SBF), the former CEO of FTX, was questioned by his attorney Mark Cohen. The courtroom account was broadcasted by Matthew Russell Lee of Inner City Press on the social media platform X. SBF discussed various topics including the use of encrypted messaging apps, relying on lawyers for legal guidance, and interactions with regulators in the Bahamas.
Use of Encrypted Messaging Apps and Third-Party Hacks
SBF confirmed that FTX utilized encrypted messaging apps such as Telegram, Slack, and Signal for communications. He explained that encryption was important due to third-party hacks that had occurred, although the core systems were never compromised. SBF stated that Signal was primarily used for informal conversations and not for making major decisions.
Dependence on Lawyers and Law Firms
In regards to FTX’s former lawyers, SBF revealed that he followed an attorney’s alleged instructions to set up the company’s bank account. He also mentioned seeking guidance from lawyers at Fenwick & West regarding loan structuring and claimed that key documents like the terms of service were prepared by Dan Friedberg and Fenwick & West.
Interactions with Regulators in the Bahamas
SBF recounted an intense encounter with Bahamian police who confiscated his passport following a meeting with regulators in the Bahamas. The meeting was attended by SBF, his father, and FTX executives. It was revealed that there were plans to relocate key assets after a hack took place on the exchange.
Continued Reliance on Legal Advice
Throughout his testimony, SBF repeatedly emphasized his reliance on counsel and legal advice. He cited his lawyers’ guidance as a defense when questioned about the legality of accepting FTX deposits through Alameda.
Hot Take: FTX’s Former CEO Stresses Importance of Legal Guidance
In his court appearance, Sam Bankman-Fried highlighted the significance of lawyers in FTX’s operations. He discussed the use of encrypted messaging apps, interactions with regulators, and the role of legal advice in various aspects of the company’s activities. This testimony underscores the importance for crypto companies to have robust legal support and guidance to navigate complex regulatory landscapes and protect their interests.
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