Former FTX CEO Sam Bankman-Fried Wraps Up Testimony in Criminal Trial
The criminal trial of Sam Bankman-Fried, the former CEO of bankrupt crypto exchange FTX, reached a milestone as he finished his testimony on Tuesday. Both sides are now preparing for closing arguments set to begin tomorrow.
During cross-examination, the prosecution challenged Bankman-Fried’s defense that he was unaware of the extent of the problems at FTX and Alameda Research until the last minute. U.S. assistant attorney Danielle Sassoon focused on events in June 2022, when former FTX executives claimed that they discovered an $8 billion hole in Alameda’s balance sheet.
Bankman-Fried’s Vague Recollections
Former FTX employees Nishad Singh and Adam Yedidia testified that they informed Bankman-Fried about the negative balance at Alameda, which consisted of funds borrowed from FTX customers that were never returned. However, Bankman-Fried testified that he lacked the necessary context to understand the significance of the issue until October 2022.
Bankman-Fried’s account of events on Tuesday was unclear. He mentioned overhearing his team discussing the “fiat@” account at Alameda in June but claimed he was not directly informed about it. When he asked employees for more details, they allegedly brushed him off, telling him they were busy.
Evidence Contradicting Bankman-Fried’s Claims
The prosecution presented evidence suggesting that Bankman-Fried may have had a more realistic understanding of Alameda’s situation than he claimed. They showed a spreadsheet listing $3.9 billion worth of FTT tokens as part of Alameda’s liquid assets. When asked if he knew these tokens couldn’t be easily liquidated, Bankman-Fried agreed.
The prosecutor then referred to a Signal group chat where Bankman-Fried estimated the assets Alameda could sell to address user withdrawals. The screenshot showed that he suggested $3.9 billion, while $8 billion was needed. This indicated that Bankman-Fried realized the tokens on Alameda’s balance couldn’t be liquidated quickly.
Additional Points of Interest
The prosecutor also questioned Bankman-Fried about his attempts to befriend the Bahamian government and his state of mind after FTX’s collapse. Bankman-Fried couldn’t recall an episode described in Michael Lewis’ book, “Going Infinite,” where he allegedly offered to pay the nation’s debt.
Furthermore, the prosecution mentioned a Google document drafted by Bankman-Fried, which speculated about why one of his former subordinates did not plead guilty like others who were collaborating with the government.
Hot Take: Testimony Challenges Bankman-Fried’s Claims of Ignorance
Sam Bankman-Fried’s testimony in his criminal trial has been scrutinized by the prosecution, who have cast doubt on his defense that he was unaware of the extent of FTX and Alameda Research’s problems. The prosecution highlighted events from June 2022 when former FTX executives claim they discovered a significant negative balance at Alameda. They presented evidence suggesting that Bankman-Fried may have had a more accurate understanding of Alameda’s situation than he has admitted. As the trial nears its conclusion, these challenges to Bankman-Fried’s claims of ignorance could significantly impact the outcome.
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