Four months ahead of FTX collapsed out of business, Sam Bankman-Fried informed the jury Monday at his federal fraud and conspiracy trial he faced Caroline Ellison with concerns Alameda Research — his spouse hedge fund — may transform bancrupt.
He testified that he informed Ellison, who was once then co-chief government of Alameda and is Bankman-Fried’s ex-girlfriend, that the hedge fund must have hedged in opposition to a few of its dangerous investments.
“She started crying,” Bankman-Fried mentioned. “She also offered to step down.”
Part of Bankman-Fried’s protection technique is to deflect blame for the FTX cave in. Ellison pleaded to blame to felony fees and testified underneath a cooperation settlement with federal prosecutors in New York. She has testified that she dedicated fraud with Bankman-Fried and at his route.
She additionally testified previous this month that Bankman-Fried idea there was once a “5% chance he would become president,” and that he believed in utilitarianism and idea laws in opposition to mendacity or stealing inhibited his talent to maximise the best receive advantages for the most of the people.
Bankman-Fried conceded on the witness stand Monday he made errors however testified that he dedicated no fraud.
“Did you defraud anyone?” protection lawyer Marc Cohen requested. “No, I did not,” Bankman-Fried replied.
“Did you take customer funds?” Cohen requested, to which Bankman-Fried spoke back: “No.”
FTX founder Sam Bankman-Fried is puzzled by way of attorney Mark Cohen (no longer pictured) as he testifies in his fraud trial over the cave in of the bankrupt cryptocurrency alternate, at federal courtroom in New York City, Oct. 27, 2023 on this court docket comic strip.
Jane Rosenberg/Reuters
Bankman-Fried is on trial for what federal prosecutors have described as “one of the biggest financial frauds in American history.” The former crypto billionaire faces seven counts of fraud, conspiracy and cash laundering focused on his alleged use of shopper deposits on the crypto buying and selling platform FTX to hide losses at his hedge fund, repay loans and purchase lavish actual property, amongst different private bills.
He has pleaded no longer to blame to all counts. If convicted, he may face a sentence of as much as 110 years in jail.
The protection has attempted to persuade the jury that Bankman-Fried was once unaware of the way dire his corporate’s budget had been. He testified he traveled to the Middle East in October 2022 as a result of he felt Alameda was once solvent and in no threat of going bankrupt. Otherwise, he mentioned, “I would have been in full-on crisis mode.”
Earlier this month, prosecutors explored Bankman-Fried’s ordinary dwelling preparations and the splendid way of life he’d been dwelling within the Bahamas that was once allegedly paid for, illegally, with buyer and investor cash.
Bankman-Fried stepped down from his position at FTX in November 2022 amid a fast cave in that ended with the corporate mentioning chapter. Prosecutors charged Bankman-Fried the next month with an array of alleged crimes targeted on a scheme to defraud buyers.
In an interview with ABC News’ George Stephanopoulos in November 2022, Bankman-Fried denied understanding “there was any improper use of customer funds.”
“I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there,” Bankman-Fried mentioned on the time. “A lot of people got hurt, and that’s on me.”
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