After the first day of testimony without a jury present, former FTX CEO Sam Bankman-Fried can finally mount his own defense.
Bankman-Fried began by introducing the origins of Alameda and FTX. He described FTX as a cryptocurrency derivatives exchange that eventually collapsed and went bankrupt. He admitted to some mistakes, such as lacking risk management and employee supervision.
In the past, while working for Jane Street, Sam Bankman-Fried met Gary Wang, Nishad Singh, and Caroline Ellison, leading to the creation of Alameda Research and FTX. Alameda relocated from Berkeley to Hong Kong to seize opportunities, paving the way for FTX’s success.
Sam revealed that he proposed selling FTX to Binance but was rejected. This was one of the reasons he decided to build FTX to compete with Binance. However, Binance ended up being one of the earliest investors in FTX.
He discussed FTX’s clawback mechanism and how Alameda used the “allow negative” feature. Bankman-Fried admitted that he wasn’t aware of the specifics of how this feature was implemented.
He also shared the decision to move FTX’s headquarters from Hong Kong to the Bahamas and the company’s investment and sponsorship activities. Sam Bankman-Fried said the reason for the above decision is because the crypto legal environment in Asia has changed, as well as the COVID-19 epidemic situation.
Bankman-Fried delegated operational control of Alameda Research to others and described the liquidity crisis in 2022 when LUNA – USDT collapsed, affecting many leading companies.
The trial session concluded and will resume on Monday (October 30) with the prosecution’s cross-examination of Sam Bankman-Fried.
Report on the trial of former FTX CEO Sam Bankman-Fried:
- Day 1&2: Opening statements by the prosecutor and defense attorney
- Day 3: Crucial witnesses Adam Yetitia, Matt Huang
- Day 4: Former Chief Technology Officer of FTX Gary Wang
- Day 5&6: Former CEO of Alameda Research Caroline Ellison
- Day 7: Caroline Ellison and former Alameda Research programmer Christian Drappi
- Day 8: BlockFi CEO Zac Prince
- Day 9: Former FTX Technical Director Nishad Singh
- Day 10: SBF met with world leaders weeks before the collapse of the FTX exchange
- Day 11: Professor of Accounting and Auditing Peter Easton
- Day 12: Former FTX legal advisor Can Sun
- Day 13: Former FTX CEO Sam Bankman-Fried
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