FTX founder Sam Bankman-Fried made his first appearance during his own fraud trial on Thursday, a move that experts are calling a last-ditch effort to avoid conviction. The focus of his testimony was on private Signal messages he had shared with former colleagues and whether or not he had the authority to delete those messages.
Bankman-Fried argued that the use of encrypted messaging apps like Signal was necessary to protect FTX from constant hacking attempts. He stated that he used the app’s “auto-delete” function because Signal was primarily used for casual conversations rather than discussing official business matters. Bankman-Fried’s claim that deleting certain spreadsheets, which portrayed different versions of FTX’s balance sheet, was permissible was confirmed by his response of “yes” when asked by prosecutors.
Judge Kaplan dismissed the jury after Bankman-Fried’s testimony and will determine later if it can be repeated to the jury. One of Bankman-Fried’s defense strategies involved blaming his lawyers for advising him to structure payments from Alameda as loans rather than dividends. He justified this method as a way of avoiding double taxation.
Bankman-Fried admitted to only skimming through FTX’s terms of service, which were drafted by both in-house and outside lawyers. When asked if he believed the loans from Alameda to FTX complied with the terms of service, he replied, “Um, yes, under many circumstances.”
Throughout his testimony, Bankman-Fried’s answers were often stuttering, vague, and evasive. He frequently claimed not to know or recall specific details when prompted for further information. At one point, Judge Kaplan reprimanded the ex-CEO and instructed him to listen to the question and answer directly.
During the examination, Bankman-Fried appeared increasingly restless, fidgeting and frequently taking sips of water. When asked if he believed Alameda had the ability to use FTX customer deposits, he responded, “I wouldn’t phrase it that way, but I think the answer to the question I think you’re trying to ask is ‘yes’.”
Anthony Scaramucci, the founder of SkyBridge Capital and close to Bankman-Fried, expressed his disapproval of the founder’s decision to testify. Scaramucci stated in an interview that it was a “very bad move” for Bankman-Fried and admitted regret for introducing him to world leaders.
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