FTX founder Sam Bankman-Fried testified in federal court on Tuesday, claiming that he was unaware of the disappearance of $8 billion in customer funds until shortly before the collapse of his cryptocurrency exchange.
Bankman-Fried, who had stepped away from day-to-day decision-making at FTX’s sister company, Alameda Research, admitted that their oversight had been poor regarding the missing money, stating, “In retrospect, our oversight of that was very poor. I deeply regret not taking a deeper look into it.”
The collapse of FTX in late 2022 was largely due to the extensive loans it had provided to Alameda. Prosecutors alleged that these loans were funded by siphoning money from customer accounts. Bankman-Fried and others testified how borrowing limits were lifted for Alameda, leading to their substantial losses.
Federal prosecutors claimed that Alameda had been given unrestricted access to FTX customer funds, which were then used for speculative investments, luxury real estate purchases, private jets, and political contributions.
Closing arguments are expected to be presented on Wednesday, with the jury potentially beginning deliberation on Thursday.
Bankman-Fried’s decision to testify followed damning testimony from former executives who had pleaded guilty and agreed to testify against him. Throughout his testimony, he struggled to recall details of public statements he had made but maintained that he had been unaware of the extent of the hole in FTX’s balance sheet and the amount borrowed by Alameda.
Prosecutor Danielle Sassoon worked to undermine Bankman-Fried’s credibility with the jury by highlighting discrepancies between his previous public statements and his testimony during the trial.