Sam Bankman-Fried admitted to making management mistakes while at the helm of FTX, his former multibillion-dollar cryptocurrency empire, during testimony in his defense at trial. Bankman-Fried’s testimony in front of a Manhattan jury on Friday came a day later than anticipated, after the judge overseeing the trial, Lewis Kaplan, unexpectedly sent jurors home on Thursday afternoon in order to determine which parts of Bankman-Fried’s testimony he would allow. “I made a number of small mistakes and a number of large mistakes,” Bankman-Fried, 31, said in sharing his version of the rise and fall of crypto trading platform FTX. The biggest mistake, he said, was not implementing a dedicated risk management team. “There were significant oversights,” he said. Asked by his lawyer, Mark Cohen, if he defrauded anyone or took customers’ funds, Bankman-Fried answered: “No, I did not.” Bankman-Fried told the jury he didn’t know much about cryptocurrency before launching FTX and Alameda Research. “I had absolutely no idea how they worked,” he told Cohen. “I just knew they were things you could trade.” But, he continued, he saw an opportunity to move the cryptocurrency system forward. As FTX took off, Cohen suggested, Bankman-Fried got hopelessly overloaded. Cohen noted how FTX went from single-digit millions of daily trading in 2019 to tens of billions in 2022. “When you started FTX in 2019, did you expect this level of growth?” Cohen asked. “Absolutely not,” said Bankman-Fried. He similarly expressed in testimony that he had been overwhelmed by the snowballing amount of media attention he received, saying he “hadn’t intended to be a public face of anything”. “Even when it became sort of overwhelming, when there were more PR and interview requests than I could manage … by that point, it was too late to have a new public face of that company,” he said. Bankman-Fried’s testimony comes after the prosecution presented 12 days of testimony in federal court in Manhattan, including from former business partners and Sam Bankman Fried’s ex-girlfriend, Caroline Ellison. Questioning from Bankman-Fried’s defense team sought to humanize the notoriously quirky executive and explain away some of the company’s unconventional, including employees co-habitating. It also addressed Bankman-Fried’s romantic relationship with Ellison – the CEO of a hedge fund closely associated with FTX who has become a star witness for the prosecution. Ellison has testified that Bankman-Fried masterminded billions of dollars in fraud, and that his disheveled boy genius appearance was a carefully curated facade. In testimony on Friday, Bankman-Fried said the two began dating on and off starting in 2020, and that their final breakup was in spring 2022. Prosecutors have accused Bankman-Fried of pillaging FTX for his own high-flying ends. He faces seven counts of wire fraud and conspiracy to launder money, felony charges that could carry sentences of decades in prison if he is convicted. He has pleaded not guilty to the allegations that he stole FTX customers’ funds and used them for a $40m Bahamas penthouse, A-list celebrity endorsements and $100m in political contributions. The trial began in early October, and has seen prosecutors put forward multiple witnesses including former members of Bankman-Fried’s inner circle who say they committed crimes at his direction. Gary Wang, a co-founder of FTX, testified that Bankman-Fried was not surprised to hear about an $8bn hole in FTX’s balance sheet. Ellison andWang have both pleaded guilty in agreements with federal prosecutors to wire, securities and commodities fraud. Bankman-Fried has pleaded not guilty. He was arrested in the Bahamas and extradited to the United States last December, a month after his businesses collapsed. Although Bankman-Fried did not testify in front of a jury on Thursday, he did testify in front of the judge. And the possibility of him taking the stand drew large crowds to the lower Manhattan courthouse on Thursday. Those in court included Bankman-Fried’s parents, as well as Michael Lewis, the author who recently published a book on Bankman-Fried. Three overflow rooms contained dozens of crypto enthusiasts and spectators. But the anticipation was swiftly deflated by Kaplan’s surprise change of plans. Kaplan indicated in Thursday’s proceedings that the jury may start deliberating on the case early next week, meaning closing arguments could be expected as soon as Monday.
Sam Bankman-Fried admits to ‘large mistakes’ in crypto fraud trial testimony
