Former FTX CEO Sam Bankman-Fried Blames Caroline Ellison for Poor Management
The trial of FTX is underway, and today, Sam Bankman-Fried, the former CEO and founder of FTX, took the stand. Bankman-Fried placed the blame on his ex-girlfriend and Alameda CEO, Caroline Ellison, for the poor management of loans and credit. While he admitted to some mistakes on his part, he denied several allegations made by his former colleagues during the trial.
Key Highlights from Bankman-Fried’s Testimony
- Bankman-Fried denied defrauding anyone.
- He initially borrowed from Genesis, Celsius, BlockFi, and Voyager for Alameda.
- Contrary to previous claims, Bankman-Fried denied that Alameda was referred to as “Sam’s Crypto Trading Firm.”
- Bankman-Fried received a yearly salary of $200,000 from Alameda.
- The move of FTX and Alameda to Hong Kong and then the Bahamas was driven by a desire for a more flexible regulatory environment.
- The aggressive marketing strategies for FTX were funded by loans from Alameda, most of which came from FTX customer balances.
- Bankman-Fried emphasized that Alameda was solely a market maker on FTX and had a significant line of credit.
- He acknowledged that Caroline Ellison was a good manager but lacked focus on risk management.
- Bankman-Fried claimed ignorance about the “Allow Negative” code written by FTX co-founder Gary Wang, which served as Alameda’s liquidation cushion.
- He admitted that political donations were made using Alameda loans to influence crypto regulations.
- Bankman-Fried acknowledged a significant drop in Alameda’s liquidity and internal concerns about the firm’s solvency.
- He once again blamed Ellison, stating that Alameda failed to hedge its bets despite his recommendation for a $2 billion safety net.
- In 2022, Bankman-Fried considered closing down Alameda due to the lack of proper management.
- He described Nishad Singh as “nervous and halting.”
The testimony will continue on Oct. 30, with cross-examination and a rebuttal case from prosecutors. A verdict is expected before Nov. 3.
Hot Take: Sam Bankman-Fried Points Fingers at Caroline Ellison and Denies Wrongdoing in FTX Trial
In the ongoing trial of FTX, former CEO Sam Bankman-Fried took the stand today, shifting blame onto Caroline Ellison for poor management in Alameda. Bankman-Fried admitted to some mistakes but denied allegations made by his former colleagues. He denied defrauding anyone and clarified that Alameda was not called “Sam’s Crypto Trading Firm.” He explained that loans from Alameda funded FTX’s aggressive marketing strategies, with most of the funds coming from customer balances. Bankman-Fried stressed that Alameda was solely a market maker on FTX and had a substantial line of credit. He admitted to using customer funds for political donations to influence crypto regulations. The trial continues with cross-examination and a verdict is expected soon.
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