Bankman-Fried takes stand, says he made ‘small mistakes’

Sam Bankman-Fried, founder of the collapsed crypto firm FTX, said he made ‘small mistakes’ but did not commit fraud.

Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, took the stand at his trial on Friday and said that while he may have made mistakes he did not commit fraud or steal from customers.

“I made a number of small mistakes and a number of large mistakes,” the onetime crypto wunderkind said in reply to a question from one of his lawyers, Mark Cohen.

“By far the biggest mistake was that we didn’t have a team dedicated to risk management,” Bankman-Fried said.

His high-stakes decision to testify on his own behalf, which opens him up to cross-examination, came after three weeks of devastating testimony against the 31-year-old accused of stealing billions of dollars from clients.

Bankman-Fried, who was wearing a gray suit and tie, denied any criminal wrongdoing under questioning from Cohen.

“Did you defraud anyone?” his lawyer asked.

“I did not,” Bankman-Fried replied.

“Did you steal customer funds?”

“No,” he said.

During his first hour of testimony, Bankman-Fried, known as SBF, mainly recounted the 2017 founding of the hedge fund Alameda Research, his personally owned trading company, and the crypto platform FTX in 2019.

Bankman-Fried, once one of the most respected figures in crypto, is accused of illegally using FTX funds for often risky trading by Alameda Research.

He has been charged with seven counts of fraud, embezzlement and criminal conspiracy and, if convicted, could face a de facto life sentence of more than 100 years in prison.

$8.7 billion unaccounted for

At the time of FTX’s bankruptcy in November 2022, some $8.7 billion was unaccounted for. 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 colleagues for FTX’s sudden collapse but key witnesses in recent weeks, all former FTX or Alameda employees, refuted his account.

Supported by internal documents compiled by the prosecution, they said he was behind the breaches and did not lose sight of the financial situation of FTX and Alameda.

Among those taking the stand was Caroline Ellison, Bankman-Fried’s former business partner and girlfriend.

She offered damning evidence against him and delivered details on his management, saying he was involved in all major decisions.

Ellison, a Stanford University mathematics graduate, was appointed by Bankman-Fried in 2021 to head Alameda, whose activities were largely financed by money from customers of FTX without their knowledge.

She has pleaded guilty to fraud charges and agreed to cooperate with the prosecution, as have two other close associates of Bankman-Fried.

Bankman-Fried’s decision to testify in his own defense is unusual in a country where criminal defendants generally decline to do so because they have to face cross-examination and run the risk of incriminating themselves.

© 2023 AFP

Bankman-Fried takes stand, says he made ‘small mistakes’ (2023, October 27)
retrieved 27 October 2023

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