SBF trial day 13: FTX founder claims ignorance in mock testimony

United States v Sam Bankman-Fried continued its fourth week at trial with testimony from the FTX founder himself however, Judge Kaplan excused the jury until Oct. 27 to thrash out details of the defendants’ statements.

What has been described by some as America’s largest crypto fraud case could come to a close by early November 2023, with FTX founder Sam Bankman-Fried testifying in his criminal trial for fraud on Oct. 26 per InnerCityPress.

Bankman-Fried is one of four witnesses, and his testimony is expected to form the lion’s share of the defense’s bid to challenge arguments claiming that FTX’s former CEO broke federal financial laws.

Defense attorneys moved for a motion to dismiss the case, arguing a deficit of evidence that proves fraud and money laundering. The FTX founder is notably on trial for seven counts of these charges. 

Judge Kaplan denied the motion after federal prosecutors cited testimony from BlockFi CEO Zac Prince and alleged fraudulent transactions exposed by previous witnesses. 

Final government witnesses

FBI agent Mark Troyano said Bankman-Fried was part of over 300 Signal group chats during his time leading crypto trading firm Alameda Research and FTX, his crypto exchange. The auto-delete function was active on at least 280 of these internal chat rooms according to the witness. 

Ex-Alameda CEO Caroline Ellison claimed Bankman-Fried insisted on the auto-delete to shroud contentious conversations from regulators if they ever came probing. 

FTX founder Sam Bankman-Fried testifies

Bankman-Fried told the court, absent jury, that auto-delete was not turned on for decision-making channels and Signal was employed to mitigate external attacks as FTX had suffered third-party breaches in the past. 

The defendant confirmed that Alameda Research funded venture investments but noted that FTX general counsel Daniel Friedberg and Can Sun oversaw the legal paperwork that restructured these capital transactions as well as FTX’s terms of service.

Bankman-Fried admitted to not reading the whole document but instead trusted the work of internal lawyers and consultants from Fenwick & West. Friedberg and lawyers at the crypto exchange also knew about the auto-delete on Signal, according to the witness whose mock testimony featured several “I don’t recall” statements.

To his knowledge, the quant trading firm didn’t dip into customer funds and investments had to be made via loans to override perceived conflicts of interest.

Bankman-Fried’s strategy seemed to shift the blame to his legal advisers at the time, claiming ignorance regarding specific matters like Alameda’s exemption from liquidation protocols on FTX. 

The witness also explained that in-house attorneys drafted payment agent agreements to manage deposits into Alameda’s North Dimension bank account on behalf of FTX customers.

Bankman-Fried’s full testimony before Judge Kaplan and the jury is scheduled for Oct. 27 in what is lined up to be the final witness testimony in his trial on fraud and money laundering charges.