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He said that Alameda “borrowed” them
On Friday , Sam Bankman - Fried sat on the stand , once again in an outsize gray suit and purplish tie , and attest in front of a panel . He ’s on trial for seven complaint related to fraud and money laundering and has been sit silently the past four weeks , waiting for his probability to talk .
Bankman - Fried co - establish FTX in 2019 alongside Gary Wang , after they co - founded crypto trading firm Alameda Research in the fall of 2017 . At the fourth dimension , they were 25 years onetime with no story of starting a company , he said . When he got into the crypto universe , he said he love “ basically nothing . ” But over clip , he said , his vision grew to “ establish the best [ crypto exchange ] production on the market ” and to “ move the ecosystem forward . ”
“ Turned out [ to be ] the opposite of that , ” Bankman - Fried said . “ A lot of the great unwashed got hurt . ”
When asked by his lead attorney , Mark Cohen , whether he defrauded or took customer funds , Bankman - Fried say , “ No , I did not . ”
On Thursday , Judge Lewis Kaplan heard from Bankman - Friedwithout a juryto square off whether his testimonial could be portion out with jurors . Among those topics : FTX ’s datum retention insurance , the fact that he “ skim over ” price of service , Alameda ’s use of the exchange ’ customer funds , and more information about Dan Friedberg , who Bankman - Fried take to be FTX ’s general counsel .
On the stand on Friday , Bankman - Fried seemed more thoughtful with his solvent than he had the premature sidereal day . “ I made a number of small mistakes , ” Bankman - Fried said Friday . But he said the freehanded mistake was having no risk management team at FTX , which led to “ pregnant lapse . ”
FTX maturate its users into the “ millions ” before its collapse , and revenue expanded from $ 10 million to $ 20 million in 2019 , to $ 80 million in 2020 and to $ 1 billion in 2021 . Daily tax income in 2021 was $ 3 million , Bankman - Fried suppose . At the time , FTX had teams that manage abidance , legal , KYC ( know your node ) and other area .
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As FTX grew , “ it became untenable ” to pass the exchange and Alameda as CEO , he say . So in 2021 , he tapped Caroline Ellison and Sam Trabucco to be co - CEOs . Trabucco left the company in May 2022 . Even though he was no longer the face of the crypto firm , Bankman - Fried say he was still involved in venture , hedging and danger management for Alameda while running FTX .
Every words in the courtroom ’s caboose was full for the testimony on Friday , but the room remain primarily silent apart from what was come about at the front of the room .
When asked whether Alameda “ adopt ” money from FTX , Bankman - Fried said his sympathy was that the store came from the exchange ’s users who were margin trading , and it was the collateral from them . He tell that the money was “ sent to FTX for security ” and “ loan out to Alameda . ”
During the first two year , Alameda was the “ biggest ” payment processor for FTX , he said . hoi polloi would wire money to Alameda accounts to wedge their stock into FTX because the exchange did n’t have its own bank account at the metre .
Sam Bankman - Fried call for the stand , but without jurors
When asked whether the funds were tracked , Bankman - Fried say , “ Wish I had a better understanding , ” adding that FTX did n’t have custody of the assets — Alameda did . “ At the time I was n’t entirely sure what was encounter with the finances . ” He tell he thought they were sitting in Alameda ’s account and sent to FTX “ or if Alameda ‘ borrowed ’ that it would be reflect and in the end owed back to FTX . ”
FTX did n’t have limitation with funds it borrowed , he said : So long as Alameda ’s assets were slap-up than their liabilities , it was OK to apply funds .
But inearlier testimony , prosecuting officer highlight the term of armed service , which did not permit the exchange to meet customer cash in hand . One provision express that “ none of the digital asset in your accounts are the property of , or shall or may be loaned to FTX trading ” ; there was another that sound out customers “ control the digital asset held in your account . ”
The defense did not ask Bankman - Fried about those provision .
