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“The defense calls Sam Bankman-Fried.”
The phrases hung within the air contained in the hushed federal courtroom. Every eye fastened on the defendant – his as soon as unruly hair shorn, an off-the-rack grey swimsuit hanging from his thinned body.
Sam Bankman-Fried rose to his toes shortly earlier than 10 o’clock and raised his proper hand. Then, in the identical boyish voice that received over the crypto world, the person often known as SBF started to talk.
“Did you defraud anyone?” his lawyer, Mark Cohen requested.
“No, I did not,” Bankman-Fried answered.
“Did you take customer funds?” Cohen clarified. “No,” he mentioned.
For the primary time, the 12 jurors heard Bankman-Fried inform his story, in his personal phrases, concerning the collapse of the FTX crypto empire.
For the subsequent 5 hours, Bankman-Fried largely painted himself as a disengaged CEO, who didn’t code, oversee Alameda or do little greater than skim the agency’s phrases of service.
“I wish I had a better understanding than I did,” he advised the jury. “I wasn’t entirely sure what was happening.”
Still, he acknowledged that “a lot of people got hurt” and that he made some errors.
Bankman-Fried faces many years in jail on prices that he directed the switch of FTX buyer cash into Alameda Research, an affiliated hedge fund, for dangerous investments, political donations and costly actual property earlier than each corporations spiraled out of business final 12 months.
Rarely do white-collar defendants take the stand of their protection. Even extra not often does their testimony finish with a verdict of not responsible. After so many buddies and colleagues turned in opposition to him, Bankman-Fried resorted to the one witness that he was certain would defend him at his felony trial: himself.
Whatever the decision, Bankman-Fried’s testimony will go down as a signature episode in probably the most dramatic company implosions in latest reminiscence. Bankman-Fried, who shot to worldwide fame at FTX, is accused of orchestrating one of many greatest frauds of all time.
Friday’s testimony was the lengthy-anticipated climax of the month-lengthy trial in Lower Manhattan. In his testimony, Bankman-Fried basically reiterated that it was all a mistake.
Old Colleagues
He tried to solid doubt on testimony from his former colleagues and buddies: Alameda Chief Executive Officer Caroline Ellison, FTX’s former head of engineering Nishad Singh, and Gary Wang, a co-founding father of the change. All three, who’ve pleaded responsible to fraud and cooperated with prosecutors, mentioned Bankman-Fried was the one calling the photographs when buyer funds have been misused.
Bankman-Fried testified that he urged Ellison to hedge Alameda’s positions, to no avail.
He mentioned that in June 2022, she advised him she was involved the hedge fund had gone bankrupt however “was not very confident.”
After just a few hours of Singh, Wang and former FTX coder Adam Yedidia investigating the state of affairs, Bankman-Fried mentioned he was advised there was a “bug” overestimating Alameda liabilities by $eight billion. He recalled Ellison saying that adjusting for the bug meant Alameda’s internet asset worth was truly $eight billion to $10 billion.
Bankman-Fried mentioned due to this he was stunned to be taught later that Alameda truly owed FTX round $eight billion and that he wasn’t conscious the steadiness was being tracked by way of an account referred to as fiat@ftx.com. In complete, that meant the hedge fund owed $10 billion as a result of its essential account additionally had a unfavorable steadiness of about $2 billion.
“I was very surprised,” he testified, contradicting testimony of his former interior circle, who mentioned he was effectively conscious of the fiat@ account and knew it was monitoring Alameda’s entry to buyer funds.
‘Freakoutedness’
Cohen requested Bankman-Fried about his considerations that Alameda had an excessive amount of threat in August 2022 and a word that Ellison wrote itemizing “things Sam is freaking out about.” He requested Bankman-Fried if he was freaking out on the time.
“I don’t tend to show a lot of freakoutedness, but relative to my standard, yes,” he mentioned.
Bankman-Fried maintained, as he has all alongside, that the collapse of his crypto change – an implosion that reverberated by way of Washington, Wall Street, Silicon Valley – resulted from incorrect-headed choices fairly than wrongdoing.
He mentioned that “by far the biggest mistake” FTX made was not hiring a chief threat officer. The function of making FTX was to “build the best product on the market,” he testified. “It turned out basically the opposite of that.”
On the stand, Bankman-Fried spoke calmly and with confidence. Occasionally, he’d look towards the jury and generally chuckled at questions. Earlier, Bankman-Fried’s legal professionals assured the decide that their shopper was receiving the suitable dose of Adderall to assist him focus.
Bankman-Fried described himself as “somewhat introverted” and claimed he turned the general public face of FTX by “accident at first.”
Blame Game
His testimony included quite a few mentions of different folks, an indication that he wasn’t working alone or answerable for every thing at FTX and Alameda.
The former FTX chief government mentioned that whereas he had final supervisory authority over Singh and Wang, they usually made coding choices on their very own.
“I am not a programmer myself,” he testified.
When requested about his relationship with Ellison, he handled the subject gently. He mentioned their on-and-off romantic relationship ended as a result of he “didn’t have the time or the energy to put in what I think she wanted.”
Jurors paid closed consideration as Bankman-Fried advised the story of assembly Wang in faculty, his early work at Jane Street Capital, and launching Alameda in Berkeley, California. Interest pale when he embarked into explaining the technical particulars of buying and selling at FTX, firm insurance policies and crypto markets.
He advised jurors about his time on the Massachusetts Institute of Technology, which he attended from 2010 by way of 2014. He referred to as the student fraternity Epsilon Theta he belonged to “nerdy and dry.”
There have been “lots of board games, no drinking,” he recalled.
The testimony mirrors factors raised by Cohen in his opening assertion, through which he portrayed his shopper as a tough employee, who by no means drank and by no means supposed to defraud anybody — not like the “cartoon villain” he claimed prosecutors have been attempting to make him out to be.
The former crypto mogul mentioned he wasn’t good at naming issues and the hedge fund finally turned Alameda Research as a result of it was only a generic identify that made sense provided that Berkeley was positioned in Alameda County.
That remark drew a smile from his father, Joe Bankman, who sat within the second row of the courtroom together with his mother, Barbara Fried. The two handed notes forwards and backwards all through their son’s testimony on a authorized pad.
Experience
Bankman-Fried tried to painting himself and the others at Alameda as kids with no idea of the best way to run a enterprise.
“These were 25-year-olds who had no experience in starting a company,” he testified. The authorities efficiently objected to that line of testimony, nevertheless, chopping his feedback brief.
Bankman-Fried confirmed that Alameda had a line of credit score and will borrow from FTX, the central focus of prosecutor’s case. But he mentioned that Alameda supplied bids for crypto trades, and FTX would usually give different so-referred to as market makers strains of credit score to “make it more efficient for them” to ship purchase and promote orders.
Bankman-Fried claimed that he knew roughly the quantity Alameda was utilizing however “was not aware of a theoretical maximum.”
After hours on the witness stand, Bankman-Fried might have made progress with some spectators within the public gallery. Greg Cawthorne, a crypto software program engineer touring from London, arrived round 2:05 a.m. to get a seat in the primary courtroom.
“After seeing two days of the trial, I am definitely maybe a little less fully against him,” Cawthorne mentioned. “Now I gotta think maybe there were some more doubts than I thought.”
“Today he seemed almost charismatic – almost, not quite,” Cawthorne mentioned.
The phrases hung within the air contained in the hushed federal courtroom. Every eye fastened on the defendant – his as soon as unruly hair shorn, an off-the-rack grey swimsuit hanging from his thinned body.
Sam Bankman-Fried rose to his toes shortly earlier than 10 o’clock and raised his proper hand. Then, in the identical boyish voice that received over the crypto world, the person often known as SBF started to talk.
“Did you defraud anyone?” his lawyer, Mark Cohen requested.
“No, I did not,” Bankman-Fried answered.
“Did you take customer funds?” Cohen clarified. “No,” he mentioned.
For the primary time, the 12 jurors heard Bankman-Fried inform his story, in his personal phrases, concerning the collapse of the FTX crypto empire.
For the subsequent 5 hours, Bankman-Fried largely painted himself as a disengaged CEO, who didn’t code, oversee Alameda or do little greater than skim the agency’s phrases of service.
“I wish I had a better understanding than I did,” he advised the jury. “I wasn’t entirely sure what was happening.”
Still, he acknowledged that “a lot of people got hurt” and that he made some errors.
Bankman-Fried faces many years in jail on prices that he directed the switch of FTX buyer cash into Alameda Research, an affiliated hedge fund, for dangerous investments, political donations and costly actual property earlier than each corporations spiraled out of business final 12 months.
Rarely do white-collar defendants take the stand of their protection. Even extra not often does their testimony finish with a verdict of not responsible. After so many buddies and colleagues turned in opposition to him, Bankman-Fried resorted to the one witness that he was certain would defend him at his felony trial: himself.
Whatever the decision, Bankman-Fried’s testimony will go down as a signature episode in probably the most dramatic company implosions in latest reminiscence. Bankman-Fried, who shot to worldwide fame at FTX, is accused of orchestrating one of many greatest frauds of all time.
Friday’s testimony was the lengthy-anticipated climax of the month-lengthy trial in Lower Manhattan. In his testimony, Bankman-Fried basically reiterated that it was all a mistake.
Old Colleagues
He tried to solid doubt on testimony from his former colleagues and buddies: Alameda Chief Executive Officer Caroline Ellison, FTX’s former head of engineering Nishad Singh, and Gary Wang, a co-founding father of the change. All three, who’ve pleaded responsible to fraud and cooperated with prosecutors, mentioned Bankman-Fried was the one calling the photographs when buyer funds have been misused.
Bankman-Fried testified that he urged Ellison to hedge Alameda’s positions, to no avail.
He mentioned that in June 2022, she advised him she was involved the hedge fund had gone bankrupt however “was not very confident.”
After just a few hours of Singh, Wang and former FTX coder Adam Yedidia investigating the state of affairs, Bankman-Fried mentioned he was advised there was a “bug” overestimating Alameda liabilities by $eight billion. He recalled Ellison saying that adjusting for the bug meant Alameda’s internet asset worth was truly $eight billion to $10 billion.
Bankman-Fried mentioned due to this he was stunned to be taught later that Alameda truly owed FTX round $eight billion and that he wasn’t conscious the steadiness was being tracked by way of an account referred to as fiat@ftx.com. In complete, that meant the hedge fund owed $10 billion as a result of its essential account additionally had a unfavorable steadiness of about $2 billion.
“I was very surprised,” he testified, contradicting testimony of his former interior circle, who mentioned he was effectively conscious of the fiat@ account and knew it was monitoring Alameda’s entry to buyer funds.
‘Freakoutedness’
Cohen requested Bankman-Fried about his considerations that Alameda had an excessive amount of threat in August 2022 and a word that Ellison wrote itemizing “things Sam is freaking out about.” He requested Bankman-Fried if he was freaking out on the time.
“I don’t tend to show a lot of freakoutedness, but relative to my standard, yes,” he mentioned.
Bankman-Fried maintained, as he has all alongside, that the collapse of his crypto change – an implosion that reverberated by way of Washington, Wall Street, Silicon Valley – resulted from incorrect-headed choices fairly than wrongdoing.
He mentioned that “by far the biggest mistake” FTX made was not hiring a chief threat officer. The function of making FTX was to “build the best product on the market,” he testified. “It turned out basically the opposite of that.”
On the stand, Bankman-Fried spoke calmly and with confidence. Occasionally, he’d look towards the jury and generally chuckled at questions. Earlier, Bankman-Fried’s legal professionals assured the decide that their shopper was receiving the suitable dose of Adderall to assist him focus.
Bankman-Fried described himself as “somewhat introverted” and claimed he turned the general public face of FTX by “accident at first.”
Blame Game
His testimony included quite a few mentions of different folks, an indication that he wasn’t working alone or answerable for every thing at FTX and Alameda.
The former FTX chief government mentioned that whereas he had final supervisory authority over Singh and Wang, they usually made coding choices on their very own.
“I am not a programmer myself,” he testified.
When requested about his relationship with Ellison, he handled the subject gently. He mentioned their on-and-off romantic relationship ended as a result of he “didn’t have the time or the energy to put in what I think she wanted.”
Jurors paid closed consideration as Bankman-Fried advised the story of assembly Wang in faculty, his early work at Jane Street Capital, and launching Alameda in Berkeley, California. Interest pale when he embarked into explaining the technical particulars of buying and selling at FTX, firm insurance policies and crypto markets.
He advised jurors about his time on the Massachusetts Institute of Technology, which he attended from 2010 by way of 2014. He referred to as the student fraternity Epsilon Theta he belonged to “nerdy and dry.”
There have been “lots of board games, no drinking,” he recalled.
The testimony mirrors factors raised by Cohen in his opening assertion, through which he portrayed his shopper as a tough employee, who by no means drank and by no means supposed to defraud anybody — not like the “cartoon villain” he claimed prosecutors have been attempting to make him out to be.
The former crypto mogul mentioned he wasn’t good at naming issues and the hedge fund finally turned Alameda Research as a result of it was only a generic identify that made sense provided that Berkeley was positioned in Alameda County.
That remark drew a smile from his father, Joe Bankman, who sat within the second row of the courtroom together with his mother, Barbara Fried. The two handed notes forwards and backwards all through their son’s testimony on a authorized pad.
Experience
Bankman-Fried tried to painting himself and the others at Alameda as kids with no idea of the best way to run a enterprise.
“These were 25-year-olds who had no experience in starting a company,” he testified. The authorities efficiently objected to that line of testimony, nevertheless, chopping his feedback brief.
Bankman-Fried confirmed that Alameda had a line of credit score and will borrow from FTX, the central focus of prosecutor’s case. But he mentioned that Alameda supplied bids for crypto trades, and FTX would usually give different so-referred to as market makers strains of credit score to “make it more efficient for them” to ship purchase and promote orders.
Bankman-Fried claimed that he knew roughly the quantity Alameda was utilizing however “was not aware of a theoretical maximum.”
After hours on the witness stand, Bankman-Fried might have made progress with some spectators within the public gallery. Greg Cawthorne, a crypto software program engineer touring from London, arrived round 2:05 a.m. to get a seat in the primary courtroom.
“After seeing two days of the trial, I am definitely maybe a little less fully against him,” Cawthorne mentioned. “Now I gotta think maybe there were some more doubts than I thought.”
“Today he seemed almost charismatic – almost, not quite,” Cawthorne mentioned.
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