Sam Bankman-Fried Admits to Minor Errors
During his trial on Friday, Sam Bankman-Fried, the founder of the defunct cryptocurrency exchange FTX, testified that although he may have made errors, he vehemently denied any allegations of fraud or customer theft.
“I made a bunch of little mistakes and a bunch of big mistakes,” the crypto wunderkind once said in response to a question from one of his lawyers, Mark Cohen.
“By far the biggest mistake was not having a team dedicated to risk management,” Bankman-Fried said.
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His high-stakes decision to testify on his own behalf, opening him up to cross-examination, came after three weeks of devastating testimony as a 31-year-old accused of stealing billions of dollars from clients.
Bankman-Fried, wearing a gray suit and tie, denied criminal wrongdoing during Cohen’s interrogation.
“Did you cheat on anyone?” his lawyer asked.
“I don’t,” Bankman-Fried replied.
“Did you steal customer funds?”
“No,” he said.
During the first hour, Bankman-Fried, known as SBF, talked mainly about the Alameda Research hedge fund, his personally owned trading firm and the 2019 founding of the crypto platform FTX.
Bankman-Frieda, once one of the most respected figures in crypto, is accused of illegally using Alameda Research’s FTX funds for often risky trading.
He is charged with seven counts of fraud, embezzlement and criminal conspiracy and, if convicted, could face an effective sentence of more than 100 years to life in prison.
– $8.7 billion unaccounted for –
When FTX filed for bankruptcy in November 2022, approximately $8.7 billion was outstanding. Most of the funds have since been recovered by liquidators and should be paid out to customers in early 2024.
Bankman-Fried has blamed former associates for FTX’s sudden collapse, but key witnesses in recent weeks, all former FTX or Alameda employees, disputed her account.
Backed by internal documents compiled by prosecutors, they said he was behind the violations and overlooked the financial situation of FTX and Alameda.
Among the recipients was Caroline Ellison, Bankman-Fried’s former business partner and girlfriend.
He offered damning evidence against him and provided details of his leadership, saying he was involved in all important decisions.
Ellison, a Stanford University math graduate, was appointed by Bankman-Fried in 2021 to head Alameda, which was largely funded by FTX’s client funds without their knowledge.
He has pleaded guilty to fraud charges and agreed to cooperate with prosecutors, as have two other close associates of Bankman-Fried.
Bankman-Fried’s decision to testify in her own defense is unusual in a country where criminal defendants typically refuse to do so because they face cross-examination and risk incriminating themselves.
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