The Former CEO of FTX Testifies in Fraud Trial
The former CEO of FTX, Sam Bankman-Fried (SBF), is testifying in his own fraud trial against the US government. In court transcripts, SBF recounts the day that Binance’s Changpeng Zhao (CZ) tweeted about liquidating all of its FTX Tokens (FTT). SBF was concerned about a potential bank run, where depositors would withdraw their money due to fears of FTX’s failure.
Despite SBF’s attempt to respond with a tweet, stating that FTX would buy FTT at $22, the withdrawals continued to increase. SBF also clarifies that FTX did not invest customer assets. Last week, SBF decided to testify after his colleagues provided damaging evidence against him.
Hot Take: Sam Bankman-Fried’s Testimony Reveals Concerns About a Bank Run
In his own fraud trial, Sam Bankman-Fried expressed concerns about a potential bank run before the collapse of FTX in November last year. He testified that he was worried when Binance’s CZ tweeted about liquidating all FTX Tokens. Despite his attempt to reassure customers with a response tweet, the withdrawals continued to increase, indicating a liquidity crisis. Bankman-Fried also clarified that FTX did not invest customer assets. His testimony comes after his colleagues provided damaging evidence against him. The trial will continue as more information is revealed.
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