Sam Bankman-Fried and Caroline Ellison, ex-boyfriends and former business partners, are bouncing responsibility for FTX’s collapse. Starting next week, the trial will move toward the final stage.
- Sam Bankman-Fried admitted to making “big mistakes” during his management of FTX.
- He denied any fraud or misappropriation of client funds.
- He tried to shift some of the blame for FTX’s collapse to Caroline Ellison.
The trial against Sam Bankman-Fried, founder of FTX, continues. Bankman-Fried was arrested in the Bahamas and extradited to the United States last December, a month after his business collapsed. He is charged with seven counts, including fraud and conspiracy to launder money, criminal charges that could carry prison sentences of decades if convicted.
Caroline Ellison’s testimony
The prosecution brought in several personalities to testify, from former business partners to Caroline Ellison, former CEO of Alameda Research as well as the defendant’s ex-girlfriend. It was the latter who claimed during her testimony that the decision to use FTX client funds to cover Alameda’s shortcomings would be “Sam’s.” Bankman-Fried would repeatedly tell her to use customer deposits to repay the company’s loans, which ended up with $8 billion in debt.
After 12 days of testimony presented by the prosecution, the defense recently began presenting its own line.
Sam Bankman-Fried’s testimony
Questioned by his own lawyer, Mark Cohen, Bankman-Fried admitted that he made “a number of small mistakes and a number of big mistakes” in managing FTX. The biggest mistake, he said, was not employing a dedicated risk management team. When asked if he had scammed anyone or taken client funds, Bankman-Fried said, “No, I didn’t.”
SBF said he did not know much about cryptocurrencies before launching FTX. He would have seen a business opportunity, but would have been overwhelmed by the exponential growth and media attention the platform received.
A significant portion of Bankman-Fried’s testimony was devoted to Caroline Ellison. The defendant sought to shift some of the blame for FTX’s collapse onto her, claiming that Ellison would repeatedly refuse to insure Alameda Research’s funds against potential losses. SBF also claimed to have raised the issue several times, but Ellison allegedly refused to act. Also according to the testimony, Bankman-Fried allegedly advised Ellison to close Alameda Research when it was in debt, but she allegedly refused.
The federal judge presiding over the case indicated that the jury could begin deliberating the case early next week. This will mark the beginning of the final phase of the trial, during which the jury will evaluate all the evidence and testimony presented to reach a verdict.
