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FTX's Bankman-Fried acknowledges 'mistakes,' denies fraud

October 27, 2023

Bankman-Fried is accused of using customer funds from the cryptocurrency exchange FTX to boost his hedge fund, as well as scheming to cheat lenders and investors.

https://p.dw.com/p/4Y7f8
Courtroom sketch of FTX founder Sam Bankman-Fried testifying in his fraud trial on October 26, 2023.
The former billionaire testified in his own defense, denying defrauding anyoneImage: Jane Rosenberg/REUTERS

FTX founder and former billionaire Sam Bankman-Fried testified in his own defense at his fraud trial on Friday, acknowledging he made mistakes but denying he defrauded anyone or took customer funds.

The 31-year-old took the witness stand in Manhattan federal court, delivering a much-anticipated testimony in his first address to the jury after 12 trial days.

Sam Bankman-Fried faces seven counts of fraud and conspiracy and is accused of embezzling funds and contributing to the downfall of the prominent cryptocurrency exchange FTX.

He pleaded not guilty.

What did Bankman-Fried say?

The crypto-currency exchange founder acknowledged that "a lot of people got hurt" when his FTX exchange collapsed. He admitted making "a number of small mistakes and a number of larger mistakes" while running the now-bankrupt exchange.

The biggest mistake, he said, was failing to implement a dedicated risk management team.

"We thought that we might be able to build the best product on the market," Bankman-Fried said. "It turned out basically the opposite of that. A lot of people got hurt, customers, employees, and the company ended up in bankruptcy."

Responding to a question by his lawyer Mark Cohen, as to whether he defrauded anyone or took customers' funds, the former billionaire said: "No, I did not."

Bankman-Fried founded the collapsed cryptocurrency exchange FTX in 2019, after launching the crypto hedge fund Alameda Research in 2017.

Prior to his involvement in the cryptocurrency sector, he worked as a trader on Wall Street. At his peak, Bankman-Fried held a fortune of $26 billion (€24 billion).

rmt/jcg (AP, Reuters)