During his testimony at his trial for fraud on Friday, Sam Bankman-Fried portrayed himself as an inexperienced but well-intentioned leader in the cryptocurrency world. He admitted to having no prior knowledge of the industry before starting FTX and acknowledged his lack of expertise in marketing when he became the public face of his company. He also acknowledged that he did not have a clear understanding of his businesses’ financial status until shortly before they failed.
The former poster child of cryptocurrency, in Manhattan federal court, denied allegations of defrauding anyone.
Bankman-Fried, age 31, admitted to some shortcomings, acknowledging that he had made both significant and minor mistakes. However, he refuted the claims of four former high-ranking employees who attributed the downfall of his businesses in the previous year to him. They alleged that as a result of a surge in customer withdrawals, billions of dollars were discovered to be missing.
The speaker expressed a belief that their team could create the top product in the market and advance the crypto ecosystem.
Bankman-Fried stated that the outcome was essentially the opposite of what was expected. Numerous individuals, including customers and employees, suffered consequences and the company ultimately went bankrupt.
When his lawyer, Mark Cohen, asked him if he had deceived anyone or misappropriated customers’ money, Bankman-Fried responded with a firm “No”.
While testifying, Bankman-Fried appeared largely composed despite potentially facing a lengthy prison sentence if found guilty on all counts. He stated, “I tend to keep my emotions in check and not freak out.”
Throughout the day, the discussion centered around the events that took place as Bankman-Fried’s companies continued to accumulate debt. Despite this, he continued to invest large sums of money into promotional efforts, such as a 2022 Super Bowl ad starring comedian Larry David, a collaboration with football player Tom Brady, and a partnership with a company that connected him with famous individuals.
In October 2022, Bankman-Fried expressed his shock upon discovering that Alameda had an undisclosed $8 billion debt, bringing their overall debt to approximately $10 billion.
According to Cohen, he plans to conclude his client’s questioning on Monday. The prosecutor stated that cross-examination will continue until Tuesday. It is unlikely that the jury will receive the case until at least late next week.
The entrepreneur from California has denied allegations of conspiracy, which claim that he used funds from clients and investors to make high-risk investments, purchase expensive homes, launch a high-profile publicity campaign, and make significant political and charitable contributions.
His statement became the focal point of a defense that has attempted to demonstrate that Bankman-Fried did not have any criminal intentions in his actions, which prosecutors claim were responsible for the downfall of businesses he had started in 2017 and later managed from the Bahamas.
During his testimony, Bankman-Fried admitted that when he founded Alameda Research, he had very little knowledge.
He stated that he was aware that a bitcoin was a digital currency.
He stated that he is naturally “somewhat introverted,” but clarified that he became the face of FTX unintentionally after some interviews went better than he anticipated.
He stated that he had given testimony on three separate occasions to Congress in order to convince lawmakers to establish regulations for cryptocurrency, which would permit the direct marketing of products to American consumers.
He stated that as the number of interview requests grew, it was too late to replace him as the face of the company.
He stated that he had zero knowledge or experience in marketing.
During the trial, Bankman-Fried’s attorney presented a photograph of him with Katy Perry, Kate Hudson, and other celebrities at the 2022 Super Bowl in Los Angeles. According to Bankman-Fried, he attended the game out of curiosity and was later invited by the celebrities to join them in their box.
Bankman-Fried’s testimony mostly centered around the rapid development and downfall of FTX, a digital currency trading platform, and Alameda. However, Cohen did at times veer off topic to inquire about his client’s personal habits and idiosyncrasies, such as his preference for casual attire and long hair.
The end of Bankman-Fried’s intermittent love affair with Caroline Ellison, the CEO of Alameda, was attributed to his own shortcomings. He expressed regret for not being able to devote enough time and effort to meet her expectations in the relationship.
He mentioned that he has not been successful in maintaining a romantic relationship for a prolonged period of time.
However, he portrayed Ellison as the antagonist responsible for his company’s downfall, accusing her of disregarding his directives for more than a year to establish a hedge for the protection of Alameda.
He mentioned that he had thought about potentially closing down the company because he was unsure if the current management was capable of justifying the risks for Alameda’s future.
When the jury was presented with a picture of Bankman-Fried holding a deck of cards, he stated that he used them to fulfill his tendency to “obsessively play with objects” – a behavior he acquired during his college days that became so extreme that he claimed to go through a deck in just one week. He has now transitioned to using fidget spinners.
Bankman-Fried, who was dressed in a suit and tie during his court appearance and had short hair, explained that he often opted for shorts and T-shirts because they were more comfortable. He also acknowledged that his long hair, which he recently cut, was a result of being too busy and lazy to get regular haircuts.
Prior to his testimony on Friday, Bankman-Fried’s lawyers were largely prohibited by Judge Lewis A. Kaplan from presenting evidence that suggested Bankman-Fried sought legal advice for his business decisions. The judge argued that such evidence could give the false impression that lawyers had approved of Bankman-Fried’s alleged actions with full understanding of all relevant information.
In December, the accused was transported from the Bahamas to New York to stand trial for fraud.
At first, he was given a $250 million bond and permitted to reside with his parents in Palo Alto, California. However, in August, the bond was taken away and he was imprisoned after Kaplan determined that he had attempted to sway potential witnesses for his upcoming trial.
The prosecution spent three weeks gathering evidence against Bankman-Fried, primarily from his former high-ranking employees who were part of his close-knit group living in a penthouse in the Bahamas.
The executives gave testimony that Bankman-Fried instructed them to utilize billions of dollars withdrawn from the FTX customers’ accounts and channeled through Alameda Research, a hedge fund founded by him in 2017, two years prior to the establishment of the FTX cryptocurrency exchange.
For additional news about Sam Bankman-Fried and FTX from the AP, visit: https://apnews.com/hub/sam-bankman-fried-ftx