Sam Bankman-Fried, the founder of the troubled FTX cryptocurrency exchange, continued his testimony in a federal criminal fraud trial on Tuesday, persistently denying any knowledge of the misappropriation of billions of dollars in customer funds. During a second day of questioning by prosecutor Danielle Sassoon, Bankman-Fried, a 31-year-old figure in the crypto world, faced inquiries regarding his awareness of whether FTX customer money had been used for investments, real estate, and other expenses. He could not identify any employees who might have authorized such spending.
Mr. Bankman-Fried expressed uncertainty, stating, “I don’t recall giving any direction,” in response to questions about the use of FTX customer funds. Both sides wrapped up their case before noon on Tuesday, with closing arguments scheduled for Wednesday.
This trial has come to symbolize the volatile nature of the cryptocurrency industry. Bankman-Fried stands accused of orchestrating a long-term scheme to divert up to $10 billion from FTX customers, channeling the funds into real estate acquisitions and supporting a crypto trading firm, Alameda Research, which he co-founded. The collapse of FTX, once valued at $32 billion, left many customers unable to recover their deposits. If convicted, Bankman-Fried could face a substantial prison sentence.
In the preceding weeks of the trial, prosecution witnesses pointed fingers at Bankman-Fried, asserting that he directed them to commit criminal acts. Three of his close associates have pleaded guilty and agreed to cooperate with prosecutors.
Facing this cascade of damaging testimony, Bankman-Fried decided to testify, a risky move for a defendant in a criminal trial. While it provided him with the opportunity to assert that he never intended to defraud anyone and that his business decisions were made in good faith, it also allowed prosecutors to scrutinize his past public statements and compare them to his private actions.
Bankman-Fried, who initially took the stand on Friday, had denied committing fraud or theft from FTX’s customers. However, he admitted to significant oversights that negatively impacted the exchange’s customers.
Under cross-examination on Monday, Prosecutor Sassoon probed Bankman-Fried about inconsistencies between his public statements and his management of FTX. He often claimed not to remember what he had said publicly.
On Tuesday, the cross-examination continued, focusing on Bankman-Fried’s actions and statements leading up to FTX’s collapse in November. He reiterated that he did not learn about the missing funds until October 2022, although other witnesses claimed he knew about it much earlier.
The trial will conclude with closing arguments on Wednesday, after which the jury will begin deliberations.
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