On Tuesday, Sam Bankman-Fried, the co-founder of FTX, concluded his defense in his criminal trial and said that he felt ‘regret’ for not investigating the $8 billion that was borrowed from FTX by Alameda Research.
The former billionaire spoke during his second day of cross-examination and stated that he had thought it was ‘permissible’ for the hedge fund to use the money deposited into a bank account under its control by FTX customers.
Initially, the FTX crypto exchange did not have its own account due to which it directed its clients to deposit money into the accounts of Alameda Research.
The 31-year-old co-founder of both Alameda and FTX said that he had thought that FTX’s main account was recording Alameda’s borrowings, but had discovered that this was not the case last year in October.
He stated that he regretted not taking a closer look at the matter. The disgraced crypto mogul was trying to convince a 12-person jury that he did not commit the fraud and other crimes he has been charged with.
According to prosecutors, Bankman-Fried looted customer funds worth billions of dollars for propping up Alameda Research.
These were used for making speculative venture investments and donations to US political campaigns worth $100 million were also made.
If convicted, Bankman-Fried would be sent to prison for decades. During his testimony, he looked toward the jurors frequently.
He also continued to smirk or frown at how the ADA framed her questions. Bankman-Fried’s father, Joseph Bankman, also attended Tuesday’s session.
The Stanford Law School professor also passed a note to his son’s lawyers at one point. Sassoon questioned Bankman-Fried about how he had spoken with other FTX executives about Alameda’s debt.
In June 2022, the hedge fund’s debt to FTX had increased substantially, but Bankman-Fried had not looked into the matter even though he owned 90% of the firm.
The former FTX CEO said that the executives had been busy and he had only asked for the high-level update. Sassoon also questioned him about his ‘cozy’ relationship he had with the officials in the Bahamas.
That is where the headquarters of the crypto exchange were based. He could not recall if he had offered to pay the national debt of the Bahamas worth $11.6 billion.
He also could not recall if he had given courtside seats to the prime minister of the Bahamas and his wife at a Miami Heat basketball game at their home arena named for FTX.
The prosecutor showed him a text message he had sent to co-workers revealing that the couple had been given courtside seats.
He was also questioned about why customers in the Bahamas had been allowed to withdraw from FTX, even though withdrawals for other customers had been halted.
Bankman-Fried stated that he thought it had been allowed by the Bahamian regulators. The Bahamas’ embassy in Washington has not responded to any of these statements.