On October 26, Sam "SBF" Bankman-Fried, the disgraced founder of FTX, provided an explanation for his actions during closed-door testimony regarding the deletion of company messages, all of this outside the presence of a jury.
When questioned by Danielle Sassoon, the U.S. attorney for the Southern District of New York, about his decision to use the encrypted messaging app Signal for corporate communications, SBF stated that he did so only with the approval of FTX attorney Daniel Friedberg. However, SBF later clarified that while the attorney approved the use of Signal, he did not seek prior approval before enabling the app's automatic message deletion feature.
SBF mentioned, "I remember at some point changing my switch to automatic deletion for a week," and explained that this practice had been in place since 2021. In response to Sassoon's inquiry about seeking approval, SBF replied, "No."
When asked to elaborate on his reasoning, SBF argued that the document retention policy in place since 2021 (which he claimed was approved by Friedberg) only pertained to emails and not other communication forms. Sassoon questioned, "Did any lawyer tell you that you could delete messages with Caroline Ellison, Gary Wang, and Nishad Singh?" SBF responded, "Not specifically," adding, "I'm sorry, I wish there was a [document retention] policy in place now. My memory..."
As for communications related to seven "fake" balance sheets prepared by colleague Caroline Ellison, SBF asserted that the removal of such information was permitted since "oral discussions do not need to be reported." When further inquiries were made about an alleged $13 billion gap in the exchange's balance sheet, SBF stated that this information had never been shared with lawyers in accordance with the company's data retention policy, expressing concern that the statements could be taken out of context and lead to embarrassment.
