{"id":6401,"date":"2023-10-28T14:17:28","date_gmt":"2023-10-28T14:17:28","guid":{"rendered":"https:\/\/infundpros.com\/business\/key-takeaways-from-sam-bankman-frieds-first-days-on-the-witness-stand\/"},"modified":"2023-10-28T14:17:28","modified_gmt":"2023-10-28T14:17:28","slug":"key-takeaways-from-sam-bankman-frieds-first-days-on-the-witness-stand","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6401","title":{"rendered":"Key takeaways from Sam Bankman-Fried\u2019s first days on the witness stand"},"content":{"rendered":"
\n

\n Former crypto billionaire Sam Bankman-Fried took the stand in front of a judge and jury last week in his criminal fraud trial. If convicted on all seven fraud counts he faces, the 31-year-old could spend the rest of his life in prison.\n <\/p>\n

\n Prosecutors claim that Bankman-Fried\u2019s crypto exchange, FTX, \u201cwas built on lies,\u201d and that he took money from customers to enrich himself and his family, buy luxury beachfront property in the Bahamas and funnel millions into US political campaigns.\n <\/p>\n

\n Bankman-Fried\u2019s lawyers argue that their client, like many entrepreneurs, was \u201cbuilding the plane as they were flying it\u201d and that \u201cit\u2019s not a crime to be the CEO of a company that later files for bankruptcy.\u201d\n <\/p>\n

\n After a full day on the witness stand Friday, the disgraced former CEO is expected to return for another day of testimony on Monday.\n <\/p>\n

\n Here\u2019s what we\u2019ve learned so far.\n <\/p>\n

\n Sam Bankman-Fried\u2019s casual wardrobe and wild curly hair were a subject of discussion in court on Friday.\n <\/p>\n

\n Caroline Ellison, Bankman-Fried\u2019s ex-girlfriend and the former CEO of sister company Alameda Research, testified earlier this month that Bankman-Fried\u2019s style was part of a marketing strategy to look like an eccentric\u00a0startup founder. Bankman-Fried\u2019s lead attorney Mark Cohen sought to undermine that.\n <\/p>\n

\n \u201cWhy did you\u00a0wear the shorts\u00a0and T-shirts?\u201d Cohen asked.\n <\/p>\n

\n \u201cI found them comfortable,\u201d Bankman-Fried replied.\n <\/p>\n

\n Cohen also asked about the famous mop of unruly dark hair.\n <\/p>\n

\n \u201cI was kind of busy and lazy and didn\u2019t bother getting a haircut for long periods of time,\u201d Bankman-Fried said.\n <\/p>\n

\n Overall, Bankman-Fried said he never intended to be the public face of FTX. It was \u201can accident\u201d at first, he told the court.\n <\/p>\n

\n \u201cI hadn\u2019t intended to be a public face of anything,\u201d he said, adding that he is \u201csomewhat introverted.\u201d\n <\/p>\n

\n Bankman-Fried\u2019s testimony has so far underscored his view that other executives at FTX and Alameda often acted independently, without direct oversight from Bankman-Fried, who was the CEO of both companies for a time.\n <\/p>\n

\n \u201cUltimately, I had authority,\u201d he said. \u201cOn the other hand, I wasn\u2019t much of a programmer,\u201d and didn\u2019t directly supervise the work of developers who were building FTX\u2019s code.\n <\/p>\n

\n Bankman-Fried is essentially saying that he wasn\u2019t aware of the so-called back door that Alameda used to withdraw FTX customer funds \u2014 a key issue in the case.\n <\/p>\n

\n \u201cI wasn\u2019t entirely sure what was happening,\u201d Bankman-Fried said.\n <\/p>\n

\n Prosecutors allege that Bankman-Fried\u00a0built a \u201cback door\u201d into FTX\u2019s accounting system,\u00a0allowing him to alter the company\u2019s financial records without tripping accounting red flags. Bankman-Fried is being accused of using this \u201cback door\u201d to transfer billions of dollars in FTX customer funds to Alameda.\n <\/p>\n

\n When Bankman-Fried and Gary Wang started FTX in 2019, there were already dozens of crypto exchanges. However, Bankman-Fried said Friday he felt their \u201cdesign philosophies\u201d were \u201cclunky\u201d and \u201cdidn\u2019t make a lot of sense.\u201d\n <\/p>\n

\n \u201cIf you wanted to trade, there were hundreds of wallets you had to manage for a single account,\u201d he said. The goal of FTX was to set up an exchange that was more seamless and approachable for traders.\n <\/p>\n

\n He said he initially envisioned quickly selling FTX to cryptocurrency exchange Binance, since he \u201chad no idea how we would get customers.\u201d\n <\/p>\n

\n However, Binance ended up using an internal team to build out its own exchange platform. And the more he thought about it, Bankman-Fried said, the more he\u00a0became convinced that he could grow FTX despite the challenge of attracting customers.\n <\/p>\n

\n It began to feel \u201cless hopeless, like maybe we could figure it out,\u201d SBF said.\n <\/p>\n

\n \u201cI thought there was maybe a 20% chance of success,\u201d and an 80% chance it would shut down after a few months, he told jurors. \u201cEven that 20% chance was a huge opportunity, given that the biggest exchanges at the time were multibillion-dollar companies.\u201d\n <\/p>\n

\n When shopping for an arena with which FTX could launch a brand partnership, Bankman-Fried testified Friday that his company had talks with a few different sports venues.\n <\/p>\n

\n Eventually, they settled on the home of the Miami Heat, in what was\u00a0reported to be a\u00a0$135 million, 19-year deal, renaming the American Airlines Arena as FTX Arena.\n <\/p>\n

\n Venues that didn\u2019t work out at the time included football stadiums for the New Orleans Saints and the Kansas City Chiefs, as well as the Kansas City Royals\u2019 baseball stadium.\n <\/p>\n

\n \u201cNo offense to the Kansas City Royals, but we didn\u2019t want to be known as the Kansas City Royals of crypto exchanges,\u201d SBF said Friday afternoon.\n <\/p>\n

\n The FTX Arena was later renamed the Kaseya Center, following the company\u2019s collapse last fall.\n <\/p>\n

\n Judge Lewis Kaplan expressed exasperation with some of Bankman-Fried\u2019s meandering answers, noting at one point: \u201cThe witness has what I\u2019ll simply call an interesting way of responding to questions.\u201d\n <\/p>\n

\n When questioned by his own attorneys, Bankman-Fried appeared confident and upbeat. But he grew increasingly agitated when grilled by prosecutors.\n <\/p>\n

\n Under cross-examination on Thursday, he frequently gave vague\u00a0answers in which he said he was \u201cnot entirely sure\u201d or didn\u2019t recall past conversations about company policies and meetings with lawyers.\n <\/p>\n

\n At one point, Kaplan interjected, urging Bankman-Fried to\u00a0\u201clisten to the question, and answer the question directly.\u201d\n <\/p>\n

\n In response to questions from Assistant US Attorney Danielle Sassoon, Bankman-Fried said, variously: \u201cI am giving you my best guess at answering the question,\u201d \u201cI am going to answer what I think the question you are asking is, but I apologize if I\u2019m answering the wrong question\u201d and \u201cI wouldn\u2019t phrase it that way. But I think that the answer to the question I understand you to be trying to ask is \u2018yes.\u2019\u201d\n <\/p>\n

\n When asked if he could \u201cpoint\u00a0out to us where in this agreement you think Alameda is permitted to spend FTX customer funds,\u201d Bankman-Fried replied:\n <\/p>\n

\n \u201cSo I should preface this by saying I\u2019m not a lawyer. I\u2019m not giving a legal interpretation of this. I\u2019m just giving, as best I can, what my memory is. And the parts of this that jibe with that, I, you know \u2014 I\u2019m not trying to give a definitive legal ruling on what this does or doesn\u2019t say. I\u2019m not sure that I would quite answer yes to the question as you most recently phrased it. I\u2019m going to try as best I can to give the answer that I believe, which is that, at least as I remember understanding it at the time, FTX either itself or I think as actually happened, without FTX as an intermediary, customers\u2019 fiat funds would be sent to Alameda bank accounts, FTX would retain, effectively, a debt from Alameda for those and a lien on Alameda\u2019s assets as security for that ongoing liability, that it would be repayable on direction from FTX in the return section here, and in the payment directive section; and that the provider could hold or transfer the funds as laid out in the FTX assets section unless or until directed to return them to FTX.\u201d\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Former crypto billionaire Sam Bankman-Fried took the stand in front of a judge and jury last week in his criminal fraud trial….<\/p>\n","protected":false},"author":1,"featured_media":6402,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-6401","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nKey takeaways from Sam Bankman-Fried\u2019s first days on the witness stand | inFundPros<\/title>\n<meta name=\"description\" content=\"Former crypto billionaire Sam Bankman-Fried took the stand in front of a judge and jury last week in his criminal fraud trial. 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