- Sam Bankman-Fried testified that he believed Alameda Research had enough assets to cover an $8 billion debt to FTX until just before the collapse. He was unconcerned by the debt, claiming it could be margin trading.
- Prosecutors allege Bankman-Fried looted FTX customer funds for Alameda and political contributions. Bankman-Fried pleaded not guilty to fraud and conspiracy.
- Bankman-Fried claimed ignorance of deputies granting special privileges to Alameda. Prosecutors challenged this, questioning how he didn’t know with directing code changes.
Sam Bankman-Fried, the founder of now-bankrupt cryptocurrency exchange FTX, took the stand in his fraud trial on Monday. In his testimony, he claimed that he believed his hedge fund Alameda Research had enough assets to cover an $8 billion debt to FTX until just days before the collapse.
Bankman-Fried Thought Alameda Could Cover the Debt
While on the stand, Bankman-Fried told jurors that he was concerned but not alarmed when he learned in October 2022 that Alameda had borrowed $8 billion from FTX customer deposits. “If it were far larger, I would have been calling a crisis,” he said.
Prosecutors allege that Bankman-Fried looted billions from FTX customers to support Alameda’s investments and political contributions. He has pleaded not guilty to fraud and conspiracy charges.
Bankman-Fried Blames “Margin Trading”
When questioned about Alameda using customer funds to repay loans in June 2022, Bankman-Fried deflected. He claimed it could have been margin trading, which he says was common on FTX.
Prosecutors challenged whether these actions fit the definition of margin trading. Bankman-Fried maintained that “it depends on the details” but that it could be considered margin trading.
Bankman-Fried Claims Ignorance of Critical Details
Throughout his testimony, Bankman-Fried has distanced himself from the alleged criminal actions of his deputies. He claimed he trusted them and was unaware they were granting special privileges to Alameda.
Prosecutors contested this, questioning how Bankman-Fried could be ignorant of the critical details when he directed the changes. Bankman-Fried maintained that he did not know the specifics of the code changes he ordered.
The trial continues as prosecutors attempt to unravel Bankman-Fried’s narrative of ignorance and pin the alleged fraud directly on him. His testimony will be pivotal in determining his guilt or innocence on the charges.