Facing decades in prison on fraud and money laundering charges, FTX co-founder Sam Bankman-Fried testified that in his own defense on Friday.
After his attorneys asked him about how FTX protected customers’ assets, they asked Bankman-Fried if FTX had a risk management department.
“We sure should have,” he answered.
FTX filed for bankruptcy protection in November 2022 after customers got nervous about its health and began withdrawing their money. It soon emerged that billions of dollars in customers’ assets had been transferred to Alameda Research, a cryptocurrency hedge fund that was FTX’s “sister” firm.
Court filings from Bankman-Fried’s lawyers showed that he also plans to testify that he approved of the transfer of FTX assets to regulators in the Bahamas, where FTX was based, because he believed they would act in customers’ best interests.
FTX co-founder Gary Wang testified earlier that Bankman-Fried directed him to make the transfer because Bahamian regulators were friendly to him and seemed willing to let Bankman-Fried stay in charge of the company.
Bankman-Fried’s lawyers say he was acting in good faith and trying to do right by customers.
The prosecution rested its case early Thursday morning and the defense began presenting its case shortly after 12 noon Eastern time. Two other defense witnesses testified before Bankman-Fried did. He then took the stand without the jury present as part of a hearing about what types of evidence would be admissible in court.
It’s often risky for defendants to testify in their defense in high-profile cases, but Bankman-Fried may not have much to lose.
Earlier in the trial, Alameda Research CEO Caroline Ellison, who also dated Bankman-Fried; former FTX engineering director Nishad Singh, and Wang all testified for the prosecution. They said that they committed crimes alongside Bankman-Fried, including misleading investors about the financial state of FTX and its sister hedge fund, Alameda Research, and stealing $10 billion from FTX customers and giving it to Alameda.
Wang, Ellison, and Singh have all pleaded guilty to criminal charges and are cooperating with the federal government in the hope they will get lighter sentences.
Bankman-Fried is charged with wire fraud, securities fraud and money laundering that defrauded FTX’s customers and Alameda’s lenders.
His lawyers argue that Bankman-Fried did not defraud anyone, that startups like FTX are complex and often fail, and that the government is looking for someone to blame for customers’ losses.
Prosecutors are expected to cross-examine Bankman-Fried after about four hours of testimony.
Source: | This article originally belongs to Nbcnews.com
