Former FTX CEO Sam “SBF” Bankman-Fried addressed a New York court under oath without the 12-member jury present.
According to courtroom reports on October 26, SBF's highly anticipated testimony struck Defense attorney Mark Cohen questioned the former FTX CEO about his use of the Signal messaging app and retention of communications data on the crypto exchange. Bankman-Fried reportedly claimed that he acted in accordance with company policies on records and that none of the media set up for "automatic deletion" were "decision-making channels."
"Why did you turn off automatic deletion?" Cohen asked Bankman-Fried.
“I had heard from the regulators,” he responded.
Cohen pressed the former FTX CEO about the creation of North Dimension, an alleged "dark entity" used to launder client funds of the crypto exchange through Alameda Research. According to SBF, former regulatory director Dan Friedberg provided him with the documents for the company's creation, which he signed without asking questions.
"Did you think accepting FTX deposits through Alameda was legal?" Cohen asked SBF.
"I did," he replied.
“I was CEO of both at the time,” Bankman-Fried said of establishing North Dimension under Alameda and FTX. "FTX didn't have a bank account."
One of the key issues in the US government's case against SBF centers on allegations that the former CEO of FTX used funds from clients of the crypto exchange to make investments through Alameda without the knowledge of the users. Bankman-Fried testified that he communicated with Friedberg, the law firm Fenwick & West and former FTX general counsel Can Sun regarding the investments.
"I thought only in futures trading," Bankman-Fried said of parts of FTX's terms of service relating to the use of client funds. “And Alameda was authorized to do that.”
Related: Sam Bankman-Fried has no way to 'get past' prosecutors: Scaramucci
fried banker will be the last witness take the stand after more than three weeks in court exposing details of the alleged commingling of funds between FTX and Alameda. According to Kaplan, the jury "will decide in the first days of next week" without hearing the entirety of the former FTX CEO's testimony.
SBF has pleaded not guilty to all seven counts in his criminal case, but is expected to face five more counts in a second trial scheduled to begin in March 2024.
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This is a developing story and more information will be added as it becomes available.
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