Sam Bankman-Fried denies knowing any FTX money was missing, as he concludes his testimony

Sam Bankman-Fried, the founder of failed cryptocurrency exchange FTX, repeatedly denied on Tuesday that he knew billions of dollars of customer money had been embezzled until shortly before his company filed for bankruptcy last year, when a federal prosecutor charged him with a second came under fire. day in his criminal fraud trial.

The 31-year-old former crypto mogul searched for an answer when the accuser, Danielle Sassoon, repeatedly asked whether he had told his employees not to spend FTX clients’ money on investments, expensive real estate and other expenses. Mr Bankman-Fried also could not name any employees who might have authorized the use of FTX customer money for those expenses.

“I don’t remember giving any indication,” Mr Bankman-Fried said three times about the spending of FTX customers’ money before concluding his testimony. Both sides laid out their cases before lunchtime on Tuesday, with closing statements expected to be made on Wednesday.

Mr. Bankman-Fried was on the stand for a third day, testifying before a jury in his own defense for a trial that has come to symbolize the highs and lows of the volatile crypto industry. The entrepreneur is accused of masterminding a years-long fraud to steal as much as $10 billion from FTX’s customers, then funneling the money into extravagant real estate purchases and other expenses, and using the money to fund a crypto trading firm he also founded. , Alameda Research.

FTX, which was valued at $32 billion at its peak, imploded spectacularly last year, leaving many customers unable to get their deposits back. Mr Bankman-Fried has pleaded not guilty to seven charges of fraud, conspiracy and money laundering. If convicted, he could face life in prison.

The first few weeks of his trial were filled with a parade of prosecution witnesses, who pointed the finger squarely at Mr Bankman-Fried and said he had ordered them to commit crimes. Three of his close associates – Caroline Ellison, Nishad Singh and Gary Wang – have pleaded guilty and agreed to cooperate with prosecutors.

The accumulation of damaging testimony may have forced the FTX founder to testify, a risky move for a criminal defendant. Taking the stand gave Mr Bankman-Fried the opportunity to say that he never intended to defraud anyone and that his business decisions were made in good faith. But it also allowed prosecutors to delve into his past public statements and contrast them with what he did in private.

When Mr. Bankman-Fried first took the stand on Friday, he was answering questions from his own lawyer, Mark Cohen. Mr Bankman-Fried denied committing fraud or stealing from FTX customers, but also acknowledged making mistakes, citing “significant mistakes” that hurt the exchange’s customers.

On Monday, Ms. Sassoon, the prosecutor, pressed Mr. Bankman-Fried during cross-examination about the inconsistencies between his public statements and the way he ran his crypto empire. He often insisted that he could not remember much of what he had said in public.

Cross-examination continued on Tuesday, focusing on actions and statements made by Mr Bankman-Fried in the lead-up to FTX’s implosion in November. Mr. Bankman-Fried, wearing the same gray suit and purple tie as on the stand the previous days, testified before a packed courtroom that also included Damian Williams, the top federal prosecutor in New York. Missing from the stand was Mr. Bankman-Fried’s mother, Stanford law professor Barbara Fried, who had been present every previous day of the trial.

Ms. Sassoon, the federal prosecutor, was relentless, asking Mr. Bankman-Fried about FTX’s failures, including whether some of the cooperating witnesses had not told the truth about Alameda, the trading firm, which owed billions in customer money to the exchange. . Mr Bankman-Fried has previously stated that he did not know about the missing funds until around October 2022, while other witnesses stated that he knew much earlier.

At one point, Ms. Sassoon asked Mr. Bankman-Fried whether Adam Yedidia, a former FTX developer who testified at the trial, was lying when he said in court that Mr. Bankman-Fried had told him in the summer of 2022 that Alameda owed $8 billion to FTX customers.

“I don’t remember him saying it that way,” Mr Bankman-Fried replied.

Ms. Sassoon then asked whether Ms. Ellison, who ran Alameda and was at one point Mr. Bankman-Fried’s girlfriend, was wrong when she testified that she and Mr. Bankman Fried had conspired with others to steal FTX customers’ money. darken.

“You didn’t tell your employees, ‘Don’t issue FTX customer deposits’?” Ms. Sassoon asked at one point.

“I didn’t do that,” Mr Bankman-Fried said. “I deeply regret not looking at it more closely.”

Ms Sassoon also asked Mr Bankman-Fried if he remembered offering favors to government officials in the Bahamas, where FTX was based. He said he did not remember giving Bahamian Prime Minister Philip Davis and his wife tickets to the FTX Arena in Miami. The jury was then shown screenshots of messages in which he said exactly that. (The arena has been renamed.)

The prosecutor also showed emails in which Mr Bankman-Fried offered to open withdrawals for Bahamian customers after FTX halted customer withdrawals when people tried to withdraw their money from the exchange last year. FTX was under investigation by Bahamian regulators at the time.

During a brief referral, Mr. Bankman-Fried tried to make it clear that he did not know who at Alameda had authorized the spending of FTX customer money. FTX had about 20 employees, he said, and “I wasn’t particularly interested in passing the blame around.”

After the closing statements on Wednesday, the jurors could start deliberating on a verdict in the case on Thursday.