Former FTX CEO Testifies in Court
Sam “SBF” Bankman-Fried, the former CEO of FTX, appeared in a New York courtroom to give his testimony under oath. The jury was not present during this session. During his testimony, Bankman-Fried was questioned about his use of the messaging app Signal and the retention of communications data at FTX.
Use of Signal and Retention of Communication Data
Defense attorney Mark Cohen asked Bankman-Fried why he turned off auto-delete on Signal. Bankman-Fried responded that he had heard from regulators and therefore decided to turn off auto-delete. He claimed that none of the media set to auto-delete were channels for making decisions.
The Creation of North Dimension
Cohen also questioned Bankman-Fried about the creation of North Dimension, an entity allegedly used to launder customer funds from FTX through Alameda Research. Bankman-Fried stated that former chief regulatory officer Dan Friedberg provided him with the papers to set up the firm, which he signed without questioning.
FTX Deposits through Alameda
Cohen asked Bankman-Fried if he believed taking FTX deposits through Alameda was legal. Bankman-Fried replied affirmatively, stating that he was the CEO of both companies at the time and that FTX did not have a bank account.
Commingling of Funds and Investments
The U.S. government’s case against Bankman-Fried revolves around allegations that he used customer funds from FTX to make investments through Alameda without users’ knowledge. Bankman-Fried testified that he communicated with Friedberg, law firm Fenwick & West, and FTX’s former general counsel Can Sun regarding these investments.
Bankman-Fried’s Defense and Future Trials
Bankman-Fried claimed that he thought FTX’s terms of service only allowed the use of customer funds for futures trading, and Alameda was authorized to do so. He will be the last witness to testify in this trial, and the jury is expected to reach a verdict next week. Bankman-Fried has pleaded not guilty to all seven charges in this case but will face five additional counts in a separate trial scheduled for March 2024.
Hot Take: Bankman-Fried Faces Tough Questions in Court
In his testimony, former FTX CEO Sam “SBF” Bankman-Fried faced tough questions regarding his use of Signal, the creation of North Dimension, and the alleged misuse of customer funds. While Bankman-Fried maintained that he acted in accordance with company policies, the prosecution focused on the commingling of funds and investments made without users’ knowledge. The outcome of this trial will have significant implications for Bankman-Fried and the crypto industry as a whole. The jury’s decision, expected next week, will determine whether Bankman-Fried is found guilty or not on the charges brought against him.
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