FTX founder Sam Bankman-Fried testified in his fraud trial Thursday with no jury present. In his testimony, he acknowledged that Alameda was being used as a payment processor for FTX, but did not recall conversations around the $13 billion hole in his crypto empire, according to Bloomberg.
Bankman-Fried is on trial for allegedly defrauding FTX customers out of billions of dollars. The prosecution wrapped up their case before lunch break on Wednesday, and minutes before SBF took the stand, Judge Lewis Kaplan unexpectedly sent jurors home to determine if the defense’s testimony was relevant to the case.
Much of Bankman-Fried’s time on the stand focused on Signal and the auto-deletion of “informal conversations” on the messaging app. Rough drafts of Alameda’s balance sheets were sent back and forth between him and Caroline Ellison on the app, which he considered to be informal.
SBF told a story of FTX where blame could be evenly spread throughout the executive branch. Chief Regulatory Officer David Friedberg, FTX President Brett Harrison and his general counsel, Can Sun and Ryne Miller, were called out specifically in his testimony. However, there was little evidence presented Thursday to suggest anyone took as much responsibility as SBF.
On Friday morning, the jury will return to the courtroom. Judge Kaplan will determine what is permissible for jurors to hear, however, the testimony was live-tweeted to the world, and they heard every detail. The defense of Bankman-Fried will continue with presenting a case that started out just as you would have expected: chaotic and disorganized.
The prosecution thoroughly laid out the reach of Sam Bankman-Fried’s fraud at FTX in the weeks leading up to this testimony. Forensic accountant Dave Easton painted a picture of where exactly $9 billion in FTX customer funds were invested in without their consent.
In the midst of SBF’s testimony, other cryptocurrency exchanges are facing pressure from American regulators. Binance claimed that US Law does not control the world with regard to a Commodity Futures Trading Commission’s lawsuit against them. New York’s Attorney General sued the Winklevoss twins’ crypto empire for defrauding New Yorkers with low-risk, high-return crypto investments.
In spite of the regulatory battles, cryptocurrency is having a moment of optimism. Speculation around a Bitcoin ETF that seems poised to enter the market soon is propping up the price of Bitcoin to near 18-month highs.