NEW YORK: Sam Bankman-Fried, testifying at his fraud trial Friday, forged himself as a bumbling
cryptocurrency visionary who knew nothing concerning the trade when he began FTX or about advertising when he grew to become the face of his firm and never sufficient about his companies to see they had been $10 billion within the gap till shortly earlier than they collapsed.
In Manhattan federal courtroom, the onetime cryptocurrency golden boy denied defrauding anybody.
Bankman-Fried, 31, acknowledged some failures, saying he made errors, giant and small, however he additionally contested testimony by 4 former high executives who blamed him for the collapse of his companies final 12 months when a rush of shoppers withdrew their cash, exposing that billions of {dollars} had been lacking.
“We thought that we’d have the ability to construct one of the best product in the marketplace” and transfer the crypto ecosystem ahead, he stated.
“It turned out principally the other of that. Lots of people bought harm – prospects, staff – and the corporate ended up in chapter,” Bankman-Fried stated.
Requested by his lawyer, Mark Cohen, if he defrauded anybody or took prospects’ funds, Bankman-Fried answered, “No I didn’t.”
Principally unemotional on the witness stand, Bankman-Fried, who may face many years in jail if he’s convicted of all prices, stated: “I do not have a tendency to point out lots of freakoutness.”
Because the day wore on, testimony centered on what occurred as Bankman-Fried’s companies sank deeper in debt, whilst he spent tons of of tens of millions of {dollars} on advertising that included a 2022 Tremendous Bowl business that includes comic Larry David, a partnership with quarterback Tom Brady and a agency that linked him to celebrities.
Bankman-Fried stated he was “very shocked” when he realized in October 2022 that Alameda had an $8 billion debt that he did not learn about, which meant the corporate’s whole debt was roughly $10 billion.
Cohen stated he anticipated to complete questioning his consumer on Monday. A prosecutor stated cross-examination would final into Tuesday. The jury was unlikely to get the case till late subsequent week on the earliest.
The California entrepreneur has pleaded not responsible to conspiracy prices accusing him of diverting billions of {dollars} from shoppers and traders to make dangerous investments, purchase luxurious housing, have interaction in a star-studded publicity marketing campaign, and make giant political and charitable donations.
His testimony grew to become the centerpiece of a protection that has tried to convey that Bankman-Fried had no felony intent in actions prosecutors say had been on to blame for the collapse final November of companies Bankman-Fried started creating in 2017 and ultimately ran from the Bahamas.
Bankman-Fried advised the jury that when he began his first firm, Alameda Analysis, he knew “principally nothing.”
“I knew {that a} bitcoin was digital,” he stated.
He described himself as “considerably introverted naturally,” however defined that he by chance grew to become the face of FTX when a number of interviews “ended up going higher than I believed they’d.”
He stated he testified thrice earlier than Congress to steer legislators to create cryptocurrency laws that might permit merchandise to be marketed on to People.
As requests for interviews grew to become overwhelming, “It was too late to discover a new public face for the corporate. I used to be the general public face,” he stated.
“I had completely no background in advertising. Completely no concept,” he stated.
His lawyer confirmed jurors an image of Bankman-Fried with singer Katy Perry, actress Kate Hudson and others on the 2022 Tremendous Bowl in Los Angeles whereas his consumer defined that he went to the sport as a result of he “thought perhaps it could be attention-grabbing” after which ended up within the field with celebrities after they noticed him and “invited” him in.
Most of Bankman-Fried’s testimony centered on the explosive progress and collapse of FTX, a cryptocurrency change, and Alameda, however Cohen often strayed into asking about his consumer’s private life and quirks, together with his penchant for carrying informal clothes and letting his hair develop.
Bankman-Fried blamed himself for the breakdown of his on-off romantic relationship with Caroline Ellison, Alameda’s chief government, saying “I did not have the time or the vitality to place in what I feel she needed from a relationship.”
“It isn’t one thing I have been nice at, with the ability to maintain a romantic relationship for a protracted interval,” he stated.
Nonetheless, he forged Ellison as a villain in his firm’s collapse, saying she didn’t comply with his directions for over a 12 months to create a hedge to guard Alameda.
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He stated he thought of shutting down the corporate at one level as a result of “there won’t be the proper administration in place for Alameda to justify its threat going ahead.”
When the jury was proven {a photograph} of Bankman-Fried with a deck of playing cards, he defined that he used them to fulfill his urge to “compulsively fidget with issues” – a behavior from his faculty years that grew so extreme that he stated he’d put on out a deck in every week. He has since switched to fidget spinners.
Bankman-Fried, carrying a go well with and tie in courtroom and quick hair, stated he regularly wore shorts and T-shirts as a result of he discovered them snug. As for the scattered lengthy hair he had till weeks in the past, he stated: “I used to be busy and lazy and did not trouble getting haircuts for lengthy durations of time.”
Earlier than Bankman-Fried testified Friday, Decide Lewis A. Kaplan largely shut down his legal professionals’ plans to point out Bankman-Fried made many choices about his companies in session with legal professionals, saying proof of that might falsely indicate that legal professionals with full data of all details “blessed what the defendant is alleged to have accomplished.”
The defendant was extradited from the Bahamas to New York in December to face fraud prices.
Initially granted a $250 million private recognizance bond and allowed to stay together with his mother and father in Palo Alto, California, the bond was revoked in August and he was jailed when Kaplan concluded that he had tried to affect potential witnesses at his upcoming trial.
Prosecutors constructed their case towards Bankman-Fried for 3 weeks, relying largely on his former high executives, an interior circle of people who shared a penthouse condo within the Bahamas with Bankman-Fried.
The executives testified that Bankman-Fried directed them to spend billions of {dollars} taken from the accounts of FTX prospects and funneled by means of Alameda Analysis, a hedge fund he began in 2017, two years earlier than he created the FTX cryptocurrency change.
