During his recent court testimony on October 31, Sam “SBF” Bankman-Fried, the founder of the cryptocurrency exchange FTX, provided insight into the handling of clients’ fiat deposits and their alleged use for risk management purposes by his crypto hedge fund, Alameda Research.
When questioned by prosecutor Danielle Sassoon of the Southern District of New York about the permissibility of using $8 billion in fiat deposits from FTX customers, SBF responded by stating that he believed it was part of risk management. He explained that, as CEO of Alameda, his primary concern was the portfolio, and while he paid some attention to FTX, he conceded that he may not have been as attentive as he should have been.
Notably, SBF testified that during his tenure as CEO of both FTX and Alameda, no employees were terminated for allegedly using $8 billion of clients’ money for speculative trading. When asked about specific employees involved in these actions, SBF claimed that he didn’t remember knowing anything about particular individuals.
AUSA Sassoon: You believed it was permitted, to spend the fiat deposits?
— Inner City Press (@innercitypress) October 31, 2023
SBF: I thought it was folded into risk management. As CEO of Alameda, I was concerned with their portfolio. At FTX, I was paying attention but not as much as I should have been
The court proceedings also revealed that the now-defunct exchange, based in the Bahamas, had close connections with the Bahamian government. Sassoon questioned SBF about giving the Bahamian Prime Minister, Philip Davis, floor-side seats at the Miami Heat Arena, to which SBF responded that he didn’t remember. Sassoon presented a message suggesting that Davis was in FTX’s courtside seats with his wife.
While SBF denied discussing paying off the Bahamian national debt with the Prime Minister, he did acknowledge assisting Davis’ son in securing a job.
Before its collapse in November, FTX had announced that it would ensure that Bahamian users were reimbursed and would prioritize processing their withdrawal requests. The FTX trial is ongoing, with an expected conclusion before the end of next week.
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