Bankman-Fried Acknowledges ‘Errors’ However Testifies He Did Not Defraud Anybody

Sam Bankman-Fried, testifying in his personal protection at his fraud trial on Friday, acknowledged {that a} “lot of individuals received damage” when the FTX cryptocurrency change he based collapsed, however stated he didn’t defraud anybody or take buyer funds.

Shortly after taking the witness stand in Manhattan federal court docket, Bankman-Fried stated he made “plenty of small errors and plenty of bigger errors” whereas operating the now-bankrupt change. The largest mistake, he stated, was not implementing a devoted danger administration staff.

“We thought that we would have the ability to construct one of the best product available on the market,” Bankman-Fried stated. “It turned out mainly the alternative of that. Lots of people received damage – prospects, staff – and the corporate ended up in chapter.”

Prosecutors accuse Bankman-Fried of utilizing FTX buyer funds to prop up his crypto-focused hedge fund, Alameda Analysis, make speculative enterprise investments and donate greater than $100 million to U.S. political campaigns. He additionally faces costs of scheming to cheat Alameda’s lenders and FTX traders.

He has pleaded not responsible.

Bankman-Fried’s trial, which started on Oct. 3, is drawing to an in depth practically a 12 months after FTX collapsed amid a wave of buyer withdrawals. The corporate declared chapter in November 2022 and Bankman-Fried was indicted the next month.

His testimony marked the primary time the dozen jurors and 5 alternates have heard straight from the 31-year-old former billionaire after 12 trial days.

Bankman-Fried, who was jailed in August after Kaplan discovered he seemingly tampered with witnesses, wore a go well with and spoke with two water bottles positioned in entrance of him on the witness stand. The previous mogul as soon as identified for carrying shorts and T-shirts and sporting an unkempt mop of curly locks reduce his hair earlier than his trial started.

Responding to questions posed by his protection lawyer Mark Cohen, Bankman-Fried spoke in calm, measured tones through the first portion of his testimony as he recounted founding Alameda in 2017, shortly after graduating from the Massachusetts Institute of Expertise, regardless of figuring out little about crypto.

However Bankman-Fried – who had studied physics and labored as a quantitative dealer at Jane Road – stated he noticed alternatives for “arbitrage” out there for digital property. He stated Alameda’s first workplace was in a small Airbnb in Berkeley, California, earlier than he later moved the agency to Hong Kong.

“We wished to be below the radar at that time limit,” he stated on the stand, including he named the hedge fund after the California county the place it was based partially so opponents wouldn’t uncover what they have been doing.

Jurors have heard from three of his closest confidantes at FTX and Alameda, all of whom have pleaded responsible and agreed to cooperate with prosecutors. They testified earlier this month that they dedicated monetary crimes at Bankman-Fried’s behest.

For prison defendants, taking the stand is a dangerous proposition as a result of it opens them as much as probably probing cross-examination by prosecutors.

However given Bankman-Fried’s penchant for danger, authorized specialists say he seemingly considered taking the stand as his greatest shot to counter the allegations made by members of his inside circle, which have been backed up by spreadsheets the three stated demonstrated how buyer funds have been stolen and textual content messages by which they mentioned FTX’s shortfall of funds with Bankman-Fried.