Former FTX CEO Sam Bankman-Fried testified in front of a jury on October 27, revealing details about his former company, including his plans to sell FTX to Binance. Bankman-Fried explained that when he and co-founder Gary Wang started FTX in 2019, they initially considered selling it to Binance due to the already crowded crypto exchange market and uncertainty about attracting customers.
However, their plan was abandoned when it was discovered that Binance was building its own exchange platform. Instead of giving up, Bankman-Fried was motivated to build something out of FTX despite the challenges of growing its customer base. He saw a “20% chance of success,” which he considered a significant opportunity, given the profitability of major exchanges.
FTX eventually became one of the largest exchanges, surpassing even Coinbase in trading volume at one point. Bankman-Fried explained that FTX differentiated itself by capitalizing on what he believed were outdated design philosophies of other exchanges. FTX attracted high-volume traders with its lower trading fees and advanced risk engine that considered the overall account when liquidating a customer’s position.
Bankman-Fried maintained his innocence throughout the trial, denying any wrongdoing in running FTX and Alameda Research. When asked by his primary counsel, Mark Cohen, whether he defrauded anyone, he responded in the negative. Bankman-Fried refuted the testimonies of witnesses who suggested that they simply followed his orders, claiming that they had more autonomy than they portrayed.
One such witness, Caroline Ellison, accused Bankman-Fried of directing her to commit crimes, specifically using FTX customers’ funds for unauthorized purposes. Bankman-Fried countered by stating that Ellison was in charge of Alameda Research and even declined his offer for another co-CEO after Sam Trabucco resigned.
Although Bankman-Fried’s testimony sheds light on the inner workings of FTX, it is important to note that the trial is still ongoing and the jury has yet to reach a verdict. The outcome will determine the legal implications for Bankman-Fried and the future of FTX.
❗Follow us on Twitter to get all the latest crypto news as soon as they're out! 🚀