Sam “SBF” Bankman-Fried testified in his ongoing criminal trial in the Southern District Court of New York, denying any wrongdoing between FTX and Alameda Research. However, he admitted to making “big mistakes” during the rapid growth of the companies. Bankman-Fried’s testimony began on October 27 and is expected to conclude on October 30.

Bankman-Fried refuted claims that he directed his inner circle to make political donations in 2021 and denied any involvement in funneling millions of dollars in contributions to political campaigns. He stated that FTX had more than $1 billion in revenue in 2021 and that political donations were made from the exchange’s own funds.

The New York Times test was mentioned in Bankman-Fried’s testimony, revealing that employees at FTX and Alameda Research were advised not to write anything they wouldn’t be comfortable seeing on the front page of the newspaper. Bankman-Fried explained that even harmless messages could be taken out of context, so sufficient context should always be provided.

Bankman-Fried also revealed details about Alameda Research’s role in FTX, including being a payment provider, liquidity provider, market maker, and client of the exchange. He discussed the failure to implement hedging strategies and the exemption for Alameda to go negative without activating the risk engine. The terms of use of FTX allowed Alameda to borrow funds for trading purposes.

The defense is expected to conclude Bankman-Fried’s examination on October 30, followed by cross-examinations and closing arguments from both sides. If found guilty of all fraud and conspiracy counts, Bankman-Fried could face up to 115 years in jail.

FAQs

What is Sam Bankman-Fried’s testimony about?

Sam Bankman-Fried’s testimony in his ongoing criminal trial in the Southern District Court of New York revolves around denying any wrongdoing between FTX and Alameda Research while admitting to making mistakes during the growth of the companies.

What claims did Bankman-Fried refute?

Bankman-Fried refuted claims that he directed his inner circle to make political donations in 2021. He denied any involvement in funneling millions of dollars in contributions to political campaigns and stated that FTX’s revenue in 2021 funded the donations.

What is the New York Times test mentioned in the testimony?

The New York Times test is a guideline for employees at FTX and Alameda Research. It advises employees not to write anything they wouldn’t be comfortable seeing on the front page of the newspaper, as even harmless messages can be misinterpreted when taken out of context.

What role did Alameda Research play in FTX?

Alameda Research served as FTX’s payment provider for wire transactions when the exchange couldn’t have its own account. It also acted as the primary liquidity provider, market maker, and client of FTX. Alameda’s role prompted custom features in FTX’s code to accommodate its needs.

What is the potential outcome for Bankman-Fried?

If found guilty of all fraud and conspiracy counts, Bankman-Fried could face up to 115 years in jail.