Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, testified in his own trial on Monday. Prosecutors focused on the discrepancies between Bankman-Fried’s public and private claims about FTX, grilling him about his alleged misappropriation and embezzlement of billions of dollars from FTX into Alameda Research, his hedge fund. Bankman-Fried’s defense lawyer, Mark Cohen, wrapped up his questioning earlier in the day, emphasizing the efforts made by Bankman-Fried to improve FTX’s safety and stability.
During cross-examination, assistant US attorney Danielle Sassoon questioned Bankman-Fried about his persona and branding. Sassoon raised the issue of Bankman-Fried’s unkempt appearance, suggesting it was a deliberate choice to project a “tech genius” image. Bankman-Fried denied this, stating that his hair was not cut strategically but due to being busy and lazy. Sassoon also questioned Bankman-Fried’s intelligence and his perception of himself as a smart CEO.
The prosecutor further probed Bankman-Fried about his ownership of both FTX and Alameda, challenging his assertion that Caroline Ellison, his ex-girlfriend and Alameda Research CEO, was solely responsible for hedging Alameda’s positions. Sassoon also questioned Bankman-Fried about his efforts to reassure customers about FTX’s transparency and safety, as well as his planned congressional testimony in support of regulation.
Bankman-Fried admitted to making mistakes but denied defrauding FTX customers. He acknowledged the absence of a risk management department at FTX and pleaded not guilty to the charges. Bankman-Fried’s defense attorneys have portrayed him as an overwhelmed math nerd who never intended to exploit billions of dollars.
If convicted, Bankman-Fried faces potential decades in prison.