As the trials continue, a glimpse into the days leading up to the collapse of the defunct cryptocurrency exchange FTX reveals that Sam Bankman-Fried (SBF), the former CEO of the exchange expressed his belief that both FTX and its sister trading firm Alameda Research could still be salvaged.
Also, the failed entrepreneur insisted that his crypto exchange and its assets were fine. This statement came up after Binance, the exchange’s rival announced it would be selling its holdings of FTX’s token. SBF also mentioned that the exchange has enough to cover all its clients’ holdings.
Sam Bankman-Fried Quest for Capital
One of the central themes in Caroline Ellison’s testimony was SBF’s unwavering pursuit of new capital to fund ambitious trading strategies and acquisitions. The former Alameda executives testified that Alameda’s research initially relied on funds from friends and family. However, as it ambitions grew, SBF sought external leaders to maintain liquidity
What particularly drew attention during the testimony was the practice of borrowing customer deposits, which allegedly began at SBF’s direction while he was the CEO of Alameda Research. This practice involved using funds deposited by customers on the platform to enable more trades, investments, and acquisitions.
Ellison also 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.
SBF Denies Defrauding FTX Users
Wrapping up his defense case, SBF attributed some responsibility for the exchange’s collapse to Gary Wang, the former Chief Technology Officer at FTX, and Nishad Singh. He mentioned that Wang is partly responsible for creating the allow negative button for Alameda Research.
Additionally, the disgraced founder criticized Ellison’s experience. In his words “Caroline is not a software developer and has not focused on risk management”.
FTX Founder’s Trial Deepens
Recall that Judge Kaplan initially granted a request on August 14 for Bankman-Fried to have access to Adderall and antidepressant medication in prison following his lawyers’ disclosure of his history of depressive disorder and ADHD.
However, after the approval, SBF’s legal team noted that he had gone without Adderall for 11 days. During the trials of SBF, Caroline, who previously pled guilty in exchange for their testimony, has consistently provided compelling insights into SBF’s financial actions. A key point in Ellison’s testimony has been SBF’s relentless efforts to secure money for his ambitious trading plans and purchases.