FTX Founder Blames Former Friends and Colleagues for Crypto Empire’s Downfall
Sam Bankman-Fried, the founder of FTX, used his testimony during his criminal fraud trial to shift blame onto his former friends and colleagues for the collapse of his crypto empire. Bankman-Fried is attempting to discredit the prosecution’s key witnesses, who have implicated him in the misuse of customer funds and the ultimate demise of FTX. The 31-year-old entrepreneur faces potential life imprisonment if found guilty of fraud charges related to the November collapse of FTX and Alameda Research.
Bankman-Fried Targets Ex-Girlfriend and Alameda CEO
During his testimony, Bankman-Fried directed his defense attorney to focus on Caroline Ellison, his ex-girlfriend and the former CEO of Alameda Research. He highlighted their conversations between June and September 2022, expressing concerns about Alameda’s hedging strategies given the decline in crypto prices. Bankman-Fried was worried that if the market dropped further, Alameda would become insolvent. Ellison agreed with his concerns, and he emphasized that he never intended for her to resign from her position.
Hedging Activities and Analysis
In September, Bankman-Fried discussed hedging activities with Ellison again. She assured him that Alameda had hedged but admitted that there was room for more hedging after reviewing spreadsheets of trades. Bankman-Fried’s analysis indicated that Alameda’s net asset value was still $10 billion.
Bankman-Fried Denies Committing Fraud
Bankman-Fried reiterated his innocence during his testimony, stating that he did not commit fraud. He believed that the expenses incurred by FTX, such as naming rights at a sports arena and venture investments, were funded by company profits. Throughout the trial, prosecutors have focused on Bankman-Fried’s actions that resulted in substantial losses for clients, with former employees testifying against him.
Hot Take: Bankman-Fried Shifts Blame in Fraud Trial
FTX founder Sam Bankman-Fried has used his testimony to deflect responsibility for the downfall of his crypto empire onto his former friends and colleagues. By targeting his ex-girlfriend and former CEO of Alameda Research, he aims to undermine the prosecution’s case against him. Bankman-Fried claims that he expressed concerns about Alameda’s hedging strategies and never intended for his ex-girlfriend to resign. As the trial continues, it remains to be seen how persuasive these arguments will be in swaying the jury’s opinion. Regardless, this high-profile case sheds light on the risks and consequences associated with cryptocurrency exchanges and investments.
By
By
By
By