FTX Founder Faces Tough Questions
Sam Bankman-Fried, the former chief of FTX, underwent rigorous questioning from a federal prosecutor during his testimony. Throughout the day, Bankman-Fried struggled to recall specific remarks and instructions related to his trading firm, Alameda Research.
Privileged Withdrawals for Alameda Research
During cross-examination, Bankman-Fried admitted that Alameda Research had the privilege of withdrawing billions from FTX without the risk of liquidation. The prosecutor also questioned him about Alameda’s accounts with the “Allow Negative” flag, to which Bankman-Fried responded affirmatively.
Preferential Treatment Allegations
The prosecution argued that Bankman-Fried gave preferential treatment to Alameda by allowing them to use customer deposits from FTX to pay off their debts. This contradicted his previous public statements that Alameda followed the same withdrawal limits as other customers.
Conversations and Trading Strategies
The prosecution presented evidence of Bankman-Fried discussing trading strategies with Alameda leadership. They also confronted him about directing Caroline Ellison, an Alameda employee, to buy specific crypto assets and trade Japanese government bonds.
Misleading Statements and Memory Lapses
The prosecutor confronted Bankman-Fried about touting FTX as a neutral market infrastructure while hiding Alameda’s large line of credit. Bankman-Fried displayed memory lapses throughout his testimony and was unable to recall prior statements and decisions. The prosecution also questioned him about his media appearances, private jet journeys, and various transactions.
Hot Take: Prosecution Highlights Alleged Prioritization of Self
The prosecution’s questioning revealed evidence suggesting that Bankman-Fried prioritized his own interests over those of FTX’s customers. Bankman-Fried’s memory lapses and inability to recall important details further raised doubts about his actions and decision-making.
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