FTX founder Sam Bankman-Fried’s public statements from whenFTX was riding high are now being used against him, as federal prosecutors continued their questioning during his second day of testimony in federal court.
Danielle Sassoon, the federal prosecutor, exposed the discrepancies between his public claims and his actual management of the cryptocurrency exchange before it imploded in a questioning session that lasted for hours.
Bankman-Fried’s answers were often short “yeps” or “nos,” with him insisting he couldn’t remember much of what he publicly said in the past. Sassoon revealed statements on a large projector screen showing Bankman-Fried said one thing in public, but did another in private.
The cross-examination challenged Bankman-Fried’s statements and could have damaged his trustworthiness with the jury of nine women and three men who will determine his outcome.
The federal prosecutor made the former CEO of FTX recall attempts to contact government officials in Washington, then asked him to read aloud private messages where he used an expletive to scorn regulators as worthless.
Federal prosecutors accused Bankman-Fried in December of masterminding a massive fraud to take up to $10 billion from FTX’s customers. They said he had used the money for lavish projects, such as venture capital investments, political donations, and luxury property acquisitions in the Bahamas, where FTX was located. He is also accused of creating a secret backdoor in FTX’s code, allowing his hedge fund Alameda Research, to seize billions in customer funds.
SBF has denied seven charges of fraud, conspiracy and money laundering, and could face a sentence equivalent to life imprisonment if found guilty. His associates have agreed to cooperate with the government and pleaded guilty to fraud.
As he was telling his side of the story, SBF painted himself as a hardworking founder, overwhelmed by his responsibilities and denied committing fraud, but instead blamed his associates for the collapse of FTX.
Despite his attitude on the stand, Bankman-Fried at one point conceded Alameda had a $65 billion line of credit with FTX, with the second-largest line of credit FTX had with another firm being of $150 million. He said, however, he couldn’t recall telling his former colleagues to transfer money from FTX to Alameda, or making statements about protecting customer funds. The prosecutor showed evidence contradicting his claims.
