2023-10-30 21:00:00
The former figure of cryptocurrencies and the FTX platform confronted with his contradictions at his trial. Sam Bankman-Fried (SBF) was jostled from the start of his cross-examination Monday in his federal trial in New York. During the SBF hearing which began the previous week, his lawyer Mark Cohen wanted to present, through his questions and his client’s answers, a good faith entrepreneur, devoid of dishonest intentions.
Trial of Sam Bankman-Fried: his partner at FTX accuses him of financial manipulation
SBF is on trial for having organized, without the knowledge of clients, the illegal use of funds deposited on its cryptocurrency exchange platform FTX, which went bankrupt in November 2022. The money diverted from FTX was used to supply the speculative activities, often very risky, of his investment company Alameda Research.
On Monday, the representative of the Brooklyn federal prosecutor Danielle Sassoon attacked this line of defense from the first minutes of the cross-examination. She questioned the defendant regarding a series of public statements out of step with the reality of the situation or the actual operation of his companies FTX and Alameda at the same time.
Overwhelming contradictions with his public speech
In his interviews given following the failure of FTX, Sam Bankman-Fried explained that he had distanced himself, long before the bankruptcy, from the management of Alameda, of which he remained the majority shareholder, to avoid any conflict of interest.
« Overall, I did not make decisions on the Alameda transactions, but I was not completely cut off from those operations », nevertheless admitted on Monday the one who faces up to 110 years of imprisonment if convicted. Since the trial opened, three key witnesses – including former employees – have claimed that “SBF” was fully aware of the company’s financial situation and had done nothing to change its trajectory.
The representative of the public prosecutor also noted several statements and tweets assuring that the protection of client and investor funds was a ” priority “as Alameda borrowed as much as $14 billion in customer deposits, often to make high-risk transactions.
“I don’t remember exactly”, “I’m not sure”, tirelessly sought to elude the accused. Each time, Danielle Sassoon showed a document containing a damning statement or writing. The prosecutor also pointed to Sam Bankman-Fried’s numerous interventions in Congress (three times), during which he campaigned for more regulation of the cryptocurrency sector.
Unjustifiable privileged links between FTX and Alameda
“Did you say: fuck the regulators? »however, questioned Danielle Sassoon, ready to draw out a new document demonstrating it. “I said it once.” The prosecution also recalled a series of public assertions by SBF that Alameda had no “no privileged access” to FTX and its funds
Under insistent questions from the prosecutor, SBF was forced to admit that Alameda benefited from a credit line of up to $65 billion, a staggering amount which made it an exception on the platform. The former digital currency star also admitted that Alameda was allowed to have a negative balance exceeding the value of all of its collateral without exposing itself to the closure of its account, unlike all other clients of FTX.
In November 2022, the cryptocurrency exchange platform FTX collapsed, unable to honor requests for massive withdrawals from its customers, worried to learn that part of FTX’s funds had been engaged in risky operations by Alameda, Sam Bankman-Fried’s hedge fund.
After the fall of FTX, do we need a new Bretton Woods for cryptos?
The collapse of FTX brought with it the cryptoasset market, which saw its value melt massively in this brutal crisis of investor confidence. Bitcoin, a flagship asset, saw its value halved during 2022, among other things because of the fall of FTX, before recovering.
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