Bankman-Fried retakes the witness stand for cross-examination by prosecutors Bankman-Fried retakes the witness stand for cross-examination by prosecutors
The embattled former CEO once again submitted to testifying under oath about the collapse of his crypto empire.
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Updated: Oct. 30, 2023 at 7:20 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
FTX founder Sam Bankman-Friedย once again took the stand in his ongoing criminal trial in New York on Oct. 30, this time to face cross-examination by prosecutors.
Assistant U.S. Attorney Danielle Sassoon began by determining the extent to which Bankman-Fried was involved with FTX’s sister firm, Alameda Research.
Bankman-Fried admitted to owning 90% of Alameda. However, he largely denied that he was involved in Alameda trading in 2022, stating:
“Depends on how you define trading … I would not say I was not involved in any way.”
Bankman-Fried otherwise said that he was “not involved as a general principle” in Alameda’s daily trading but took part in high-level discussions. He said that he provided Caroline Ellison, then the CEO of Alemeda, with some input on trading; specifically, he admitted that he gave Ellison some instructions related to Japanese government bonds.
Another section of the cross-examination largely focused on whether Bankman-Fried had promised to provide customers with a safe trading service. Despite those assurances, he also made statements suggesting a disregard for user protections โ with Sassoon highlighting the fact that Bankman-Fried said “f–ck regulators” in one interview.
SBF on Alameda’s special treatment
Sassoon raised the question of whether FTX treated Alameda Research differently from its other customers.
Previous testimony from former FTX associates suggested that Alameda was allowed to have special privileges such as a negative balance and unlimited credit line. Bankman-Fried admitted that most customers would not be allowed a lasting unlimited negative balance. He also did not deny that Alameda could withdraw billions of dollars from FTX using a line of credit without falling under FTX’s automatic liquidation procedures.
He also said that customers were only “sometimes” allowed to use outside investments as collateral, identifying Three Arrows Capital affiliate Crypto Lotus as one example. Alameda often used FTX’s FTT token as collateral, according to other reports.
Though he identified those instances of special treatment, Bankman-Fried often testified that he was unable to recall whether he had previously said that Alameda was treated the same as other customers. Sassoon asked several questions to that effect.
Bankman-Fried nevertheless admitted to stating, at one point prior to his company’s collapse, that Alameda “had the same access as other customers.”
Bankman-Fried remained under cross-examination at the time of writing.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
Caroline Ellison is the former lead trader and former CEO at Alameda Research.