Sam Bankman-Fried’s protection is lastly introduced. The crux of the matter is actually that he has an evidence for every part.
After weeks of prosecution testimony by which the protection scored no factors and offered no story, Bankman-Fried took the stand Friday to present his model of occasions.
Bankman-Fried is prone to be rigorously coached. Throughout breaks within the testimony, his mother and father rushed right into a small convention room with the picture advisor that they had employed, Risa Heller (the girl who allegedly planted the story of the “new face of Elizabeth Holmes” together with her). The New York Occasions), and a fleet of individuals with proof bins, laptops and information.
Bankman-Fried confirmed a marked enchancment from his conduct on the stand yesterday, giving rambling, technical solutions to questions not requested. Right now he was simply as pleasant and seemingly accommodating, however clearer in his solutions. He was particularly efficient when he advised the story of his founding of FTX and Alameda—higher than when he turned to the form of fuzzy monetary phrases he usually makes use of (“market maker,” “true up,” “loans”). ”).
The prosecutor anticipated to start cross-examination on Monday afternoon, Danielle Sassoon, has been very sharp on the cross-examination, saying she expects to conduct “substantial cross-examination.” If he will get lobs from his lawyer, Bankman-Fried might be able to return essentially the most balls; volleys from the accuser might show tougher to hit again.
Bankman-Fried began with a broad overview of his objective for FTX, together with a serious-sounding apology. “We thought we might construct possibly one of the best change available on the market,” he stated. “It truly turned out to be the other. Lots of people obtained harm,” and the corporate went bankrupt. When his lawyer, Mark Cohen, requested if he had defrauded individuals, Bankman-Fried stated, “No, I did not.”
From his coiffure to denials of legal conduct, this is what else Bankman-Fried stated Friday in response to testimony within the prosecution’s case:
On whether or not he thought his Alameda hedge fund might borrow from FTX:
“Normally, FTX had no restrictions on borrowed cash,” he stated. “We did not care if a consumer withdrew cash and used it to purchase muffins, pay enterprise bills, or the rest,” so long as his belongings exceeded his debt on the inventory change.
On Alameda getting a $65 billion line of credit score on FTX:
He stated he wasn’t conscious there was a “theoretical most” however knew Alameda had drawn down tens of millions on its line of credit score on FTX in 2019, and by 2022 that was about $2 billion. After discussing rising the road of credit score with former FTX executives Gary Wang and Nishad Singh, Bankman-Fried stated he “understood on the time that that they had carried out a function to handle that.”
Over FTX, an “allow_negative” code was created that allowed Alameda to revoke what others claimed was basically An limitless quantity:
“On the time I could not have advised you the small print of it or the title,” he testified, including that he later realized it was referred to as “allow_negative.”
On why he wore shorts and T-shirts:
“I discovered them snug.”
On why he grew his hair:
“I used to be fairly busy and lazy and did not trouble going to the hairdresser.”
About his romantic relationship with Caroline Ellison, CEO of Alameda:
They began courting in 2020, and have been “on and off” till they broke up for the ultimate time within the spring of 2022. “I, um, I did not have the time or power to place into it what I believe she wished from the connection,” he stated. It was a “mixture of my work hours, however it’s additionally not one thing I’ve traditionally been good at, with the ability to preserve romantic relationships.”
On why he appointed Ellison CEO of Alameda:
“Caroline was usually thought of an excellent supervisor,” he stated, noting that staff “describe her as dedicated, good and empathetic” and that she (and briefly her co-CEO, Sam Trabucco) was the “most suitable choice I had on the time.”
On why he lived in a luxurious penthouse within the Bahamas with 9 others, together with Ellison, Singh and Wang:
It “replicated” his group residence at MIT, he stated, and it was useful to have “plenty of administration” in a single place for after-hours conversations.
On why FTX and Alameda purchased all that actual property within the Bahamas:
It was a part of an ‘incentive program’ in order that staff had an ‘simple path’. . . to have housing within the Bahamas.” Bankman-Fried testified that he believed the funds for the property got here “from FTX’s working money circulation, revenues and enterprise capital.”
On how FTX tracked buyer deposits:
“I want I had a greater understanding than I do,” he stated. “I wasn’t fairly certain on the time. . . . What I believed was that the funds have been both held,” and despatched to FTX, or “to the extent that Alameda borrowed and used these funds,” which was mirrored in Alameda’s steadiness sheets.
On the place he thought the cash got here from to pay for FTX’s high-profile advertising and marketing, such because the naming of a stadium in Miami (prosecutors, Ellison, Singh and Wang have stated the cash got here from FTX consumer funds):
“FTX’s company funds – the revenues it had earned and the investments enterprise capitalists had made within the firm.”
On what occurred in June 2022 (Ellison testified that Bankman-Fried realized concerning the $8 billion Alameda took from FTX prospects on the time):
Bankman-Fried testified that he was in FTX’s workplace with Singh and Wang when Ellison approached and “stated she was involved that Alameda may need gone bankrupt.” He was “very shocked and fairly involved,” he stated, noting that he requested Singh and Wang to look into it, and so they reported discovering a bug in a program that overestimated the quantity of Alameda’s debt by $8 billion . The three others have been “relieved,” he stated.
Ellison requested if she ought to pay Alameda lenders who requested reimbursement of their loans. (She testified that when she did so, it was at Bankman-Fried’s path and used FTX buyer cash.) Bankman-Fried testified that he advised her this “sounds good.” He testified that he had no “express conversations” concerning the $8 billion debt Alameda owed to FTX prospects till October 2022, and that he truly realized concerning the debt by consulting a database. “I used to be very shocked,” he stated, claiming that he had thought Alameda owed about $2 billion to FTX, and that Alameda had excess of that in belongings. Nonetheless, he believed Alameda had the cash to repay FTX.
On the spreadsheet Ellison ready with seven alternate variations of Alameda’s steadiness sheet (she stated she mentioned this with Bankman-Fried):
Bankman-Fried testified that they didn’t talk about the spreadsheet “in depth,” that Ellison “thought of just a few alternative ways to assemble it,” that he doesn’t bear in mind “any element” of what they mentioned, and he advised her “that it appears cheap to me.”
In regards to the dialog with Singh held on the roof of their penthouse condominium in September 2022 (Singh testified that in that assembly he mentioned with Bankman-Fried the by then $13 billion “hole” that Alameda owed to FTX):
In line with Bankman-Fried: “[Singh] stated he was deeply involved about a variety of points,” together with Alameda’s liabilities. “I believe [Singh] might have thrown away about $8 billion,” Bankman-Fried stated, including that his response was that he was “involved” however that Alameda was “nonetheless creating wealth buying and selling.” Within the dialog, which Singh described intimately in his testimony, Bankman-Fried stated he felt like Singh appeared “very nervous and really hesitant.”
As as to if he truly “panicked,” in accordance with Ellison’s record of “Issues Sam Panicks About” was entered into proof:
About Alameda’s lack of protection, sure. “I do not have a tendency to indicate a lot panic, however relative to my commonplace, sure.”
On whether or not FTX had a threat administration group:
“We undoubtedly ought to have accomplished that, however no.”
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