Daily Times

Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, took the stand at his trial on Friday and said that while he may have made mistakes, he did not commit fraud or steal from customers.

“I made a number of small mistakes and a number of large mistakes,” the onetime crypto wunderkind said in reply to a question from one of his lawyers, Mark Cohen.

“By far the biggest mistake was that we didn’t have a team dedicated to risk management,” Bankman-Fried said.

His high-stakes decision to testify on his own behalf, which opens him up to cross-examination, came after three weeks of devastating testimony against the 31-year-old accused of stealing billions of dollars from clients.

Bankman-Fried, who was wearing a grey suit and tie, denied any criminal wrongdoing under questioning from Cohen.

“Did you defraud anyone?” his lawyer asked.

“I did not,” Bankman-Fried replied. “Did you steal customer funds?”

“No,” he said.

Bankman-Fried, once one of the most respected figures in crypto, is accused of illegally using FTX funds for often risky trading by hedge fund Alameda Research, his personally owned trading company.

He has been charged with seven counts of fraud, embezzlement and criminal conspiracy and, if convicted, could face decades in prison.

Bankman-Fried, known as SBF, began his testimony by recounting how he founded Alameda Research in 2017 and the crypto platform FTX in 2019.

Under questioning from his lawyer, he depicted himself as a young entrepreneur swamped with work, handling dozens of tasks at once and bombarded by thousands of emails every day.

“As FTX grew, it became intenable for me to run both companies,” he said. “By 2021, I was not involved in day to day operations at Alameda.”

He defended decisions which allowed Alameda to borrow massively from FTX, saying that “if there was a liquidation of Alameda, it would have disastrous consequences for the platform.”

At the time of FTX’s bankruptcy in November 2022, some $8.7 billion was unaccounted for. Most of the funds have since been recovered by liquidators and should be paid out to customers in early 2024.

Bankman-Fried has blamed former colleagues for FTX’s sudden collapse but key witnesses in recent weeks, all former FTX or Alameda employees, refuted his account.

Supported by internal documents compiled by the prosecution, they said he was behind the breaches and did not lose sight of the financial situation of FTX and Alameda.

Among those taking the stand was Caroline Ellison, Bankman-Fried’s former business partner and girlfriend.

She offered damning evidence against him and delivered details on his management, saying he was involved in all major decisions.

Ellison, a Stanford University mathematics graduate, was appointed by Bankman-Fried in 2021 to head Alameda, whose activities were largely financed by money from customers of FTX without their knowledge.

She has pleaded guilty to fraud charges and agreed to cooperate with the prosecution, as have two other close associates of Bankman-Fried.

The questioning of Bankman-Fried by his lawyers is expected to conclude on Monday when he will be subjected to cross-examination by government prosecutors.

Bankman-Fried’s decision to testify in his own defense is unusual in a country where criminal defendants generally do not do so because they have to face cross-examination and run the risk of incriminating themselves.