Quote from Heatman on October 29, 2023, 4:45 am

According to Cointelegraph: Sam Bankman-Fried, FTX’s CEO, defended himself in court this week, denying any illicit activities between FTX and Alameda Research. Despite admitting to "big mistakes" made during the two companies’ rapid expansion, Bankman-Fried insisted on his innocence in his ongoing trial in the Southern District Court of New York.

 

His official testimony started on Oct. 27, after a hearing on the previous day without the jury present. During the hearing, Bankman-Fried had difficulty addressing queries from government attorneys. However, he seemed better prepared the following day when facing the jury.

 

Bankman-Fried's testimony highlighted his denial of instructing his inner circle to make million-dollar political donations in 2021. He also claimed that FTX's Terms of Use covered interactions between Alameda and the crypto exchange. Further, the former CEO explained that he had requested additional hedging strategies for Alameda throughout 2021 and 2022, but they were never implemented.

 

The examination of Bankman-Fried by his defense is expected to conclude on Oct. 30. Following this, cross-examinations by the prosecution and closing arguments from both sides will take place. Prosecutors have suggested that a rebuttal witness may appear next week to challenge the validity of another witness's testimony.

 

Bankman-Fried faces a prison sentence of up to 115 years if convicted on all fraud and conspiracy counts.

 

During his court appearance, he denied having influenced Ryan Salame, former co-CEO of FTX Digital Markets, and Nishad Singh, former director of engineering, to channel millions of dollars to political campaigns. Despite this, he acknowledged the significant part lobbying played in his efforts to establish a regulatory framework for crypto firms in the U.S. during 2021.

 

Bankman-Fried denied using customer deposits on FTX for political campaign contributions. Instead, he said political donations were made from the exchange’s own funds.

 

Furthermore, Bankman-Fried illustrated the unique role of Alameda on FTX. Alameda served as FTX's payment provider for wire transactions while the exchange was unable to have its own account. It was also the principal liquidity provider, market maker, and a client of FTX. However, his requested hedging strategies for Alameda remained unimplemented, exposing Alameda to significant harm during market downturns.

 

The CEO could face severe consequences if found guilty, providing a stark reminder of the high stakes involved when navigating the regulatory landscape of cryptocurrency markets.