Sam Bankman-Fried took the stand in his criminal fraud trial this week, with his defense team posing questions aimed at justifying his actions in running the now-bankrupt FTX cryptocurrency exchange.
Lead defense lawyer Mark Cohen focused on Bankman-Fried’s simultaneous leadership of both FTX and his proprietary trading firm, Alameda Research. When asked by Cohen why he had signing authority for both companies’ finances, Bankman-Fried stated simply that he was CEO of both at the time. He also added that FTX didn’t have a bank account.
Further questioning his client on the intermingling of FTX customer deposits and Alameda funds, Cohen asked whether Bankman-Fried believed this was legal. SBF affirmed that he did think that taking FTX funds through Alameda was legal.
Cohen asserted that Bankman-Fried did not intentionally commit fraud
In his opening arguments, Cohen asserted that while Bankman-Fried made mistakes, he did not intentionally commit fraud. The defense claims the young founder was trying to rapidly scale up the cryptocurrency exchange. They also argued that mistakes and oversights were inevitable in such a chaotic startup environment.
Alameda Research heavily relied on FTX customer funds to make trades and loans, a co-dependency that factored into the $32 billion exchange’s swift collapse when withdrawals surged last November.
During testimony, when asked by the presiding judge if he had read FTX’s terms of service in full, Bankman-Fried admitted he had only skimmed certain parts while reading others more thoroughly.