SBF Denies Defrauding FTX Users During Trial

October 28, 2023

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Wrapping up his defense case, Sam Bankman-Fried (SBF) the ex-CEO of cryptocurrency exchange FTX, attributed some responsibility for the cryptocurrency exchange’s collapse to Gary Wang, the former Chief Technology Officer at FTX, and Nishad Singh, the final witnesses in his trial.

SBF Testifies Against FTX ex-Executives

According to the reports, SBF mentioned that Wang is partly responsible for creating the allow negative button for Alameda Research. This feature allows the exchange to trade more funds than it has available. Meanwhile, SBF said former Alameda co-CEOs Caroline Ellison and Sam Trabucco were a perfect team, although he criticized Ellison’s experience. In his words “Caroline is not a software developer and has not focused on risk management.

However, the disgraced founder’s claim contradicts the testimonies presented by Wang and Ellison. Wang mentioned in a previous post that SBF had instructed him and Singh, the former FTX engineering director, to implement the “allow negative feature in 2019”. The reference to Gary and Nishad as the focal points of SBF’s defense could potentially open avenues for further scrutiny of their actions and decisions during their tenure at FTX.

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FTX Trial Commencement

The gravity of Bankman-Fried’s situation is underscored by reports that he could potentially face over 100 years in prison if convicted on a range of charges, including fraud. The trial, which began October 3rd, sheds light on the details and circumstances surrounding these allegations.

Meanwhile, the scrutiny of SBF’s political contributions highlights the broader debate about the intersection of crypto, financial regulation, and political influence. Notably, SBF is expected to face five more criminal counts in a second trial scheduled for March 2024. Although, the 31-year-old entrepreneur has pleaded not guilty to all the charges against him.

SBF Trial: Unfolding Secrets

Furthermore, Ellison testified that when Alameda faced challenges in securing loans from traditional lenders, Sam devised a creative solution by introducing the FTT token. He allocated a significant portion of FTT tokens to Alameda for free, giving them the financial leverage they needed. This strategic move allowed Alameda to secure open-term loans from lenders like Genesis.

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As Alameda research increasingly relied on borrowing, its posted collateral grew thinner, propped up by what Ellison referred to as “Samcoins.”

Also, Ellison discovered that she was not privy to all the financial activities within the organization. In May 2022, she learned of $5 billion in loans to Alameda executives used for venture investments and political contributions.