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Sam “SBF” Bankman-Fried, the creator of the cryptocurrency exchange FTX, asserts that utilizing clients’ fiat deposits was merely a component of “risk management” for his connected crypto hedge fund, Alameda Research.
During the former crypto executive’s court testimony on Oct. 31, prosecutor Danielle Sassoon from the Southern District of New York inquired whether SBF thought it was acceptable to utilize $8 billion of FTX customers’ fiat funds. “I believed it was integrated into risk management,” he stated. “As CEO of Alameda, I was focused on their portfolio. At FTX, I was attentive but not as much as I ought to have been.”
According to SBF, throughout his time as both CEO of FTX and Alameda, no personnel were dismissed for allegedly diverting $8 billion of clients’ funds for speculative trading. “I don’t recall knowing anything about specific employees,” SBF responded to Sassoon’s inquiry.
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Bankman-Fried also revealed during the trial that the now-defunct exchange, which was based in the Bahamas, had significant connections with the government of the island nation. “You provided the Bahamas prime minister with floor side seats at the Miami Heat Arena,” Sassoon asked. “I don’t remember that,” SBF replied. “Here’s a message where you mention he is in FTX’s courtside seats with his wife,” Sassoon stated.
It is alleged that SBF discussed with Bahamian Prime Minister Philip Davis the possibility of settling his country’s debt. Although the crypto executive refutes this, he acknowledges assisting Davis’ son in obtaining a job.
Related: Sam Bankman-Fried trial [Day 15] — latest update: Live coverage
Shortly before the exchange’s collapse last November, FTX declared that Bahamian users would be fully compensated and that their withdrawal requests would be prioritized. The FTX trial is currently ongoing and is anticipated to conclude before the end of next week.
