FTX’s Bankman-Fried admits ‘mistakes’, denies fraud at trial

 

In his testimony at the high-profile fraud trial in New York, FTX founder Sam Bankman-Fried openly acknowledged his errors while vehemently denying any fraudulent intent. He expressed regret that many individuals suffered when FTX faced challenges last year, emphasizing that his initial aim was to develop a superior product. During extensive questioning, Bankman-Fried painted a picture of himself as an overwhelmed visionary with limited knowledge of the cryptocurrency sector before establishing FTX in 2019.

He admitted to a series of small and significant mistakes, with a notable lapse being the absence of a dedicated risk management team. Bankman-Fried, once a highly regarded figure in the cryptocurrency realm, is facing allegations of misappropriating FTX funds for high-risk trading activities conducted by his hedge fund, Alameda Research. Charged with seven counts of fraud, embezzlement, and criminal conspiracy, he could potentially face lengthy prison sentences if convicted. Bankman-Fried maintains his plea of not guilty, and he publicly challenged his former business partner and ex-girlfriend, Caroline Ellison, who testified on behalf of the prosecution.

Bankman-Fried claimed that he instructed Ellison to ensure financial hedging against cryptocurrency market downturns, but she failed to implement these safeguards, attributing her reluctance to his instructions. Ellison, who has admitted guilt to fraud charges and is cooperating with the prosecution, has testified that Bankman-Fried played a central role in significant decisions. His decision to testify in his defense is uncommon in the United States, where suspects are typically discouraged from taking the stand to avoid self-incrimination.