Sam Bankman-Fried took the stand before a jury for the first time in his criminal trial for allegedly defrauding FTX customers. The exchange’s co-founder and former CEO tried to recast the image that prosecutors spent nearly three weeks shaping of an executive who defrauded customers and dismissed the concerns of the three members of his inner circle, all of whom named him as their co-conspirator earlier in the trial.
Responding to his defense team’s gentle questioning, SBF spent large parts of his testimony, offering alternative, often long-winded explanations for actions and behavior that prosecutors allege demonstrated intent to evade legal and regulatory scrutiny of the business he created. He admitted to making mistakes, which supported his defense team’s “failed entrepreneur” strategy, and none more significant than a failure to create a dedicated risk management team.
Bankman-Fried denied committing any crimes or attempting to defraud anyone and said that he believed funds used for sponsorships, real estate purchases, political donations, venture investments and payments to lenders did not come from customer funds. At times, he attempted to shift blame for certain decisions on the inner circle, who he insisted had the authority to take action “on behalf of the company without consulting” him.
SBF described former CEO of Alameda Research, Caroline Ellison, his on-and-off girlfriend, as a good trader and researcher who did not act on his stated concerns about the FTX trading arm’s exposure to market risk and importance of hedging. Ellison, who agreed to a plea deal with prosecutors, testified early in the trial that Bankman-Fried had asked her to manipulate Alameda balance sheets at Bankman-Fried’s direction to make them seem less risky to lenders and that Alameda had used FTX customer funds for its own investments. Prosecutors have promised a robust cross-examination next week. Whether they or Bankman-Fried’s version of events is more persuasive for jurors remains uncertain.
Catch up on Unchained’s previous coverage:
- SBF Trial, Day 1: Possible Witnesses Include FTX Insiders, Big Names in Crypto, and SBF’s Family
- SBF Trial, Day 2: DOJ Says Sam Bankman-Fried ‘Lied’ While Defense Claims His Actions Were ‘Reasonable’
- SBF Trial, Day 3: Why a True Believer in FTX Flipped Once He Learned One Fact
- SBF Trial, Day 4: SBF’s Lawyers Annoy Judge Kaplan, While Wang Reveals Alameda’s Special Privileges
- SBF Trial, Day 5: SBF’s Defense Finally Found Its Legs, But Can It Counter Caroline Ellison?
- SBF Trial, Day 6: Caroline Ellison Recalls ‘The Worst Week of My Life’
- SBF Trial, Day 7: In SBF Trial, Did the Defense Lose Its Opportunity With the Star Witness?
- SBF Trial, Day 8: Former BlockFi CEO Adds Credibility to Fraud Charges
- SBF Trial, Day 9: Nishad Singh Describes Former FTX CEO as a Bully and Big Spender
- SBF Trial, Day 10: Defense Struggles to Discredit Nishad Singh’s Testimony
- SBF Trial, Day 11: How Alameda Got FTX Into a $9 Billion Hole
- SBF Trial, Day 12: Former FTX General Counsel Speaks Out Against SBF
- SBF Trial, Day 13: Before Judge, Former FTX CEO Sam Bankman-Fried Gives Few Straight Answers
- Did Sam Bankman-Fried Have Intent to Defraud FTX Investors?
- Why These Lawyers Say It’s Over for SBF-But His Only Hail Mary Is to Testify
- Here’s How Sam Bankman-Fried’s High-Stakes Trial Could Play Out
- SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case
- The High-Stakes Trial of Sam Bankman-Fried Begins: What to Expect