Sam “SBF” Bankman-Fried, the former CEO of FTX, appeared before a jury in a New York courtroom for the first time and denied allegations of defrauding customers and misappropriating funds. Bankman-Fried stated that he knew very little about digital assets when he launched crypto hedge fund Alameda Research. He also acknowledged that FTX had declared bankruptcy, resulting in harm to many individuals.

Defense attorney Mark Cohen questioned Bankman-Fried about Alameda’s operations in Hong Kong and how it could have impacted the risk at FTX. The allegations against Bankman-Freid claim that he directed the use of FTX customer funds by Alameda without their knowledge. He currently faces seven criminal charges in the ongoing trial.

During the questioning, Bankman-Fried explained that Alameda served as a market maker for FTX and that they would sell off accounts if they went negative, but had backstop liquidity. He also claimed that he instructed the former FTX chief technology officer, Gary Wang, to stop liquidations of Alameda’s account and suggested that Wang implemented the “allow negative” feature without his knowledge.

Bankman-Fried’s cross-examination by the U.S. government was yet to take place at the time of publication. The trial is expected to conclude in a few business days, with both sides delivering closing arguments. Bankman-Fried is also scheduled to face five more criminal counts in a separate trial set to begin in March 2024. He has pleaded not guilty to all charges in both cases.

FAQ

What are the charges against Sam Bankman-Fried?

Sam Bankman-Fried faces seven criminal charges in the current trial, including allegations of defrauding FTX customers and misappropriating funds.

What is the claim against Bankman-Fried regarding Alameda Research?

The claim against Bankman-Fried is that he directed efforts that resulted in Alameda using FTX customer funds without their knowledge.

When is the trial expected to end?

The trial is expected to conclude within a few business days.

Will Bankman-Fried face additional charges?

Yes, Bankman-Fried is scheduled to face five more criminal counts in a second trial set to begin in March 2024.