During the criminal trial of Sam "SBF" Bankman-Fried, the former CEO of FTX, the jury was presented with the first testimony from Bankman-Fried himself. In his testimony, he largely denied having any knowledge of fraudulent activities at the cryptocurrency exchange.
Bankman-Fried testified that Gary Wang, FTX's former Chief Technology Officer, played a role in Alameda Research's development of an "allow negation" button. This feature allowed cryptocurrency hedge funds to trade more funds than they actually possessed. Bankman-Fried suggested that he was uncertain about the details of Alameda's line of credit at the time and believed that the funds were held in a bank account or sent to FTX as a stablecoin. He expressed concerns that Alameda keeping the funds would negatively affect FTX.
He also commented on former Alameda co-CEOs Carolyn Ellison and Sam Trabuco, describing them as "a good team." However, he criticized Ellison, noting her lack of experience as a software developer and her focus on research over risk management.
Bankman-Fried's testimony contradicted the earlier testimony provided by Gary Wang and Carolyn Ellison. Wang had testified that Bankman-Fried had instructed him and former FTX engineering director Nishad Singh to implement the "allow negative values" feature in 2019. Ellison mentioned that she wanted to step down as Alameda's CEO but was asked by SBF to stay, citing concerns about rumors regarding the company's financial health.
Bankman-Fried's criminal trial began on October 3 and is expected to conclude within a few business days, with closing arguments from both the prosecution and defense attorneys. Following that, the jury will consider the seven charges against him. A second trial with five additional charges is scheduled for March 2024, and Bankman-Fried has pleaded not guilty to all charges in both cases. Defense attorney Mark Cohen indicated that he plans to conclude Bankman-Fried's questioning on October 30, after which the Justice Department attorneys will cross-examine him before the jury.
