During Sam "SBF" Bankman-Fried's ongoing criminal trial, his defense attorney, Mark Cohen, engaged in rigorous questioning of the former FTX CEO, marking the first time Bankman-Fried testified in front of a jury. In the courtroom, he vehemently denied allegations of defrauding FTX customers and misappropriating their funds during his tenure at the cryptocurrency exchange. Bankman-Fried revealed that he had minimal knowledge about digital assets when he launched the cryptocurrency hedge fund, Alameda Research.
He also acknowledged that FTX had declared bankruptcy, causing harm to numerous individuals. Cohen inquired about Alameda's operations in Hong Kong and how they might impact the hedge fund. The heart of the charges against Bankman-Fried revolves around claims that he directed Alameda to use FTX client funds without FTX's knowledge. The former CEO currently faces seven criminal charges in his ongoing trial. Bankman-Fried disclosed that Alameda acted as the market maker for FTX and had mechanisms in place to handle late error liquidations, noting the importance of liquidity backup.
Moreover, Bankman-Fried stated that he informed former FTX CTO Gary Wang to cease such liquidations on Alameda accounts and suggested that Wang implement the "allow negatives" feature without his prior knowledge. However, Wang testified on October 6 that Bankman-Fried had ordered him and former FTX engineering director Nishad Singh to implement the feature in 2019. Notably, at the time of this article's publication, Bankman-Fried's testimony before the jury had not yet been cross-examined by the U.S. government. On October 26, Judge Lewis Kaplan provided a "preview" of his testimony to prosecutors and defense attorneys without the presence of the jury.
The decision for Bankman-Fried to testify was uncertain until October 25. As prosecutors were concluding their questioning of the final witness in the case, defense attorneys informed Kaplan that they intended to call only a few witnesses, including SBF.
The trial is anticipated to conclude within a few business days, with both prosecution and defense attorneys presenting their closing arguments to the jury. Subsequently, Bankman-Fried will face an additional five criminal charges in a second trial set to commence in March 2024. He has pleaded not guilty to all charges in both cases.
