Sam Bankman-Fried Addresses Mistakes in FTX Collapse

During the Bankman-Fried fraud trial in Manhattan federal court, Sam Bankman-Fried admitted to making mistakes but denied allegations of defrauding anyone or misappropriating customer funds. He acknowledged that many individuals suffered due to the collapse of his cryptocurrency exchange, FTX, including customers, employees, and the company itself. Bankman-Fried attributed these troubles to both small and significant errors, with the absence of a dedicated risk management team being the most significant oversight. He stated, “We thought that we might be able to build the best product on the market. It turned out basically the opposite of that.”

This marked the first time the 31-year-old former billionaire testified directly in front of the 12 jurors and five alternates, who have been hearing his case over the past 12 trial days. Prosecutors in the Bankman-Fried fraud trial accuse him of misusing FTX customer funds to support his crypto-focused hedge fund, Alameda Research, make speculative investments, and donate to U.S. political campaigns. He also faces charges related to cheating Alameda’s lenders and FTX investors.

The trial, which commenced on October 3, is nearing its conclusion, almost a year after FTX’s collapse and subsequent bankruptcy. Bankman-Fried has maintained his plea of not guilty. While taking the stand poses risks for criminal defendants, Bankman-Fried viewed it as an opportunity to counter the accounts of three former associates who have pleaded guilty and cooperated with prosecutors in the Bankman-Fried fraud trial. They testified earlier this month, presenting evidence of financial misconduct at his direction.