Sam Bankman-Fried Implied His Friends Lied About His Role in FTX's Collapse

Sam didn't bash it. He didn't defraud anyone, helium didn't bargain lawsuit funds – helium conscionable built a institution which "turned retired fundamentally the opposite" of the merchandise helium envisioned erstwhile helium founded FTX: "A batch of radical got wounded – customers, employees – and the institution ended up successful bankruptcy." At least, that's his story.

"The biggest mistake was we did not person a dedicated hazard absorption team, we didn't person a main hazard officer," helium told the tribunal Friday. "We had a fig of radical who were progressive to immoderate grade successful managing risk, but nary 1 dedicated to it, and determination were important oversights."

Bankman-Fried – yet – took the basal to effort and person the 17 radical overseeing his transgression fraud proceedings that FTX and Alameda Research's illness were the effect of screw-ups and errors, and of his hand-picked lieutenants' screw-ups and errors – not a deliberate fraud committed by the 31-year-old. Bankman-Fried's grounds echoed cardinal parts of his lawyer Mark Cohen's opening connection from the opening of this period – issues happened due to the fact that ex-Alameda CEO Caroline Ellison didn't hedge, due to the fact that FTX was a fast-moving institution doing large things quickly, due to the fact that a fig of marketplace shocks deed and due to the fact that Sam was conscionable 1 idiosyncratic who couldn't beryllium everyplace oregon bash anything. We got a preview of sorts connected Thursday, but Friday was the archetypal clip we saw Bankman-Fried really contiguous his ain case for wherefore helium shouldn't spell to jail.

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The archetypal fractional of Friday's grounds was fundamentally "A History of FTX, presented by Samuel Bankman-Fried." For those pursuing the lawsuit implicit the past year, thing new. For those of america who person been tracking FTX since its founding, possibly a spot of utile item but fundamentally truly thing new. But we're not the intended assemblage – the assemblage is. One assemblage subordinate successful the overflow room, who said she did not person overmuch familiarity with FTX oregon Bankman-Fried, said she recovered it useful. And I overheard a fewer radical astatine the extremity of the time Friday accidental they recovered Bankman-Fried's mentation of events plausible.

Shortly aft lunch, Bankman-Fried's defence team's strategy continued to go clearer: It's not conscionable that Sam didn't bash it, it's that the Department of Justice's cardinal witnesses are each lying. Bankman-Fried didn't accidental that, of course, but that seems to beryllium the accusation with a fig of details.

Take FTX's security fund. Former Chief Technology Officer Gary Wang told the tribunal connected Oct. 6 that this was functionally a random fig that was posted to FTX's website and aboriginal posted to societal media. Bankman-Fried said helium did not cipher the numbers – implying what, I'm not wholly sure. My mentation is he's implying idiosyncratic other had the thought of putting a random fig connected the site.

Or possibly FTX's 2021 revenue. Former Head of Engineering Nishad Singh testified that Bankman-Fried directed him to find a mode to amusement that the institution had generated implicit $1 cardinal successful gross for the year, and to backdate gross details to bash truthful – which helium yet did by marking staking rewards from EcoSerum to FTX's equilibrium sheet, astatine Bankman-Fried's direction.

"Sam projected charging EcoSerum to the relationship that paid the interest," helium said.

On Friday, Bankman-Fried said helium "had not thought of EcoSerum staking" astatine all, and that helium did not retrieve discussing backdating immoderate documents tied to this.

On hedging, Bankman-Fried said helium discussed Alameda's risks with Ellison, the company's CEO astatine the time.

"She yet said that she would look into hedging Alameda's vulnerability but I interpreted her to beryllium acold little enthusiastic than I was astir it," helium said. And portion helium discussed hedging with her "every period oregon two" done June 2022, this yet ne'er happened.

The June 2022 spreadsheet that keeps coming up this proceedings documenting Alameda's balances and liabilities erstwhile again showed its look (though not the infamous one that yet led to past year's bankruptcy). Ellison said connected Oct. 11 that Bankman-Fried "suggested I should hole immoderate alternate ways of presenting" accusation astir the figures, which led to her creating a expanse with 7 alternate presentations. She aboriginal reiterated that "it was Bankman-Fried's" thought to bash this.

On Friday, Bankman-Fried said it was Ellison who "had thought astir a fewer antithetic ways of constructing" the equilibrium sheet.

Intriguingly, Bankman-Fried said helium didn't find retired astir Alameda's $8 cardinal hole, arsenic documented by the [email protected] account, until October of 2022.

But determination are besides parts that – astatine slightest arsenic of Friday – person not yet been addressed. Assistant U.S. Attorney Nicholas Roos asked Wang wherefore Bankman-Fried said Alameda Research should instrumentality connected nonaccomplishment from a MobileCoin exploit during their treatment astir the security fund.

"He said that FTX's equilibrium sheets are much nationalist than Alameda's equilibrium sheets, that investors person entree to FTX's finances but not Alameda's finances," Wang said. While Cohen asked Bankman-Fried astir Alameda taking connected the MobileCoin loss, the taxable of investors having entree to FTX's finances did not travel up.

And Ellison had antecedently testified that portion she and Bankman-Fried had discussed hedging Alameda's risks, and that Bankman-Fried blamed her for not hedging, successful her presumption it was his determination to marque task investments and different fiscal decisions which enactment Alameda successful an unrecoverable presumption by the autumn of 2022.

"I felt that the cardinal crushed we were successful the concern was that we had borrowed these billions of dollars successful open-term loans and utilized them for illiquid investments," – each of which were Bankman-Fried's idea, she said.

Ellison had besides testified that Bankman-Fried knew the lone mode for Alameda to wage its lenders was utilizing the enactment of credit, which meant "using FTX lawsuit assets." Again, these circumstantial details did not travel up.

There's besides the assorted radical chats and written documents prosecutors person tied Bankman-Fried to, specified arsenic the 1 Singh testified astir wherever Bankman-Fried, Bankman-Fried's brother, erstwhile FTX Digital Markets CEO Ryan Salame oregon governmental consultants organized governmental donations.

On Friday, Bankman-Fried said helium did not nonstop Salame oregon Singh to marque circumstantial donations, but helium did prosecute governmental consultants (such arsenic Guarding Against Pandemics, which his member helped run).

Bankman-Fried is going to proceed his grounds connected Monday, with Cohen estimating possibly 2 much hours of nonstop examination. Unfortunately for Bankman-Fried, and possibly the communicative he's crafting, that means that he'll again look Assistant U.S. Attorney Danielle Sassoon – you know, the authoritative who figuratively punched him successful the look repeatedly past Thursday – for what she described arsenic a "significant cross-examination." She said she doesn't deliberation the transverse volition instrumentality a time and a fractional but it'll surely spell into Tuesday.

The latest program successful what's frankly a beauteous dynamic concern is this: