Sam Bankman-Fried FTX Trial: Disputing Misleading Users

“In his defense case, the former CEO of FTX, as the final witness, attributed some of the crypto exchange’s downfall to the actions of Gary Wang and Nishad Singh. The jury overseeing the criminal trial of Sam “SBF” Bankman-Fried listened intently as the former FTX CEO presented his testimony for the first time. In doing so, he largely disavowed any knowledge of fraudulent activities within the crypto exchange.”

“As reported from the New York courtroom on October 27, Bankman-Fried insinuated that Wang, the former chief technology officer at FTX, bore partial responsibility for the creation of the “allow negative” feature for Alameda Research. This particular feature bestowed upon the crypto hedge fund the capacity to trade with funds that exceeded its available resources.”

“Bankman-Fried expressed his uncertainty at the time, stating, ‘I wasn’t entirely certain about what was happening.’ He pondered whether the funds were being held in a bank account or transmitted to FTX in stablecoins. If Alameda held the funds, he speculated that it would manifest as a negative balance on FTX.”

“Bankman-Fried offered insights into Caroline’s capabilities, portraying her as a proficient manager with an empathetic disposition. However, he emphasized that she was not a software developer but excelled in research, diverting her focus from risk management.”

“Remarkably, Bankman-Fried’s claims either partially or directly contradicted the testimonies provided by Wang and Ellison. Wang, who took the stand on October 6, alleged that Bankman-Fried had instructed him and Nishad Singh, the former FTX engineering director, to implement the “allow negative” feature in 2019. Ellison’s testimony revolved around her desire to step down as CEO of Alameda, to which SBF urged her to remain, citing concerns regarding rumors about the firm’s financial stability.”

“In earlier testimony, the former FTX CEO asserted that he possessed minimal knowledge about the crypto industry when Alameda was launched. Defense lawyer Mark Cohen outlined his intentions to conclude his questioning of Bankman-Fried on October 30. Subsequently, attorneys representing the Justice Department will have the opportunity to cross-examine him in the presence of the jury.”

“Bankman-Fried’s criminal trial commenced on October 3 and is anticipated to conclude within a few business days. Following the closing arguments presented by both the prosecution and defense, the jury will embark on deliberations. Subsequent proceedings may involve motions from the U.S. government, SBF’s legal team, or other administrative matters within the courthouse.”

“It’s worth noting that SBF is expected to confront five additional criminal charges in a second trial scheduled for March 2024. He has steadfastly pleaded not guilty to all charges levied against him in both cases.”