Day 14 of Sam Bankman-Fried Trial: Former FTX CEO Claimed Did Not Know What His Subordinates Did

Sam Bankman-Fried

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.

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