By
Godfrey Benjamin
May 10th, 2024
SBF began his official testimony in the case against him on October 27.
The former FTX CEO Sam Bankman-Fried’s (SBF) criminal trial took a new turn last week after he agreed to give his testimony before jurors.
The Criminal Trial So Far
The SBF trial kicked off with jury selection on October 3. Since then, there have been opening statements from both prosecutors and defendants. There have also been witness testimonies.
FTX’s co-founder and CTO Gary Wang testified that Alameda Research was used for whatever purposes he and SBF saw fit. Also, co-founder and managing partner of Paradigm, Matt Huang, shared that he would have stopped business with FTX if he had been aware of FTX’s utilization of customer funds to prop up Alameda Research.
During the second week of the criminal trial, former Alameda CEO Caroline Ellison claimed she took $14 billion from customers to repay debts to lenders under the instruction of SBF.
Things got even more interesting in the third week when FTX’s former general counsel Can Sun testified that SBF asked him to create a theoretical “legal justification” for using billions in consumer funds days before FTX filed for bankruptcy. By the end of the third week, there were conflicting opinions as to whether SBF should take the witness stand or not.
How Sam Bankman-Fried’s Testimony Went
SBF began his official testimony in the case against him on October 27. The former FTX CEO doubled down on the narrative that the FTX failure was a product of grave mistakes. He also sought to throw some of his colleagues under the bus by his testimony.
For example, SBF told the court he repeatedly asked Caroline Ellison to hedge Alameda’s risks but was not taken seriously. Likewise, SBF claimed that FTX’s terms of use covered transactions between Alameda and the crypto exchange. This, he noted, allowed Alameda to draw a line of credit that grew as market conditions worsened.
Again, SBF denied claims he directed his inner circle to make political donations in 2021. Recall that data from OpenSecret revealed that Singh gave $8 million to federal campaigns. Salame also donated $10 million to politicians via loans from Alameda Research. When queried about his own political donation, SBF noted they were made from the company’s revenue rather than customer funds.
Meanwhile, SBF also countered the narrative that his dressing was a product of calculated non-challance. Instead, he said his appearance was because he was too busy and lazy to address it.
Next Steps
The defense is expected to conclude its case at the SBF trial today October 30. Afterwards, it will be time for the prosecution’s cross-examinations and closing arguments from both sides. Should Bankman-Fried be found guilty of all fraud and conspiracy counts, he may bag as much as 115 years in jail.