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Sam Bankman-Fried, FTX CEO, Set to Testify in Federal Fraud Trial, Confirms Attorney

Image of former FTX CEO Sam Bankman-Fried taken from

Bankman-Fried is charged with fraud and money laundering for his alleged involvement in the multibillion-dollar cryptocurrency exchange FTX’s demise.

Sam Bankman-Fried, the creator of FTX, will testify in his own defense, according to a conference call his counsel had on Wednesday. His legal team’s choice positions him for a cross-examination by federal prosecutors, who might question him about the demise of his cryptocurrency exchange, FTX.

After federal prosecutors and his defense team were successful in getting the suspected fraudster a sufficient amount of his ADHD medicine, Bankman-Fried decided to testify. His lawyers had previously contended in court that he was unable to engage in his defense due to a lack of access to medicine.

It is often thought to be a dangerous move. Although the former millionaire will be permitted to answer questions from his defense team and give his own account of the collapse, this exposes Bankman-Fried to a cross-examination by federal prosecutors. A number of Bankman-Fried’s senior executives have already been asked to appear by the prosecution, including Nishad Singh and Caroline Ellison, his former love interest and current CEO of Alameda Research.

After the government concludes its case, which is anticipated to occur Thursday morning, the legal team for the co-founder of FTX will launch its defense. The last witness the prosecution will call is an FBI agent who will provide a synopsis of the case.

Defense lawyer Mark Cohen announced during the conference that three other witnesses, in addition to Bankman-Fried, will be called by the defense. After the government rested its case in a filing on Tuesday night, his attorneys objected to the government’s request that they start their defense right away.

Bankman-Fried is charged with fraud and money laundering for his alleged involvement in the multibillion-dollar cryptocurrency exchange FTX’s demise. Bankman-Fried has been charged with routinely stealing billions in client assets from the exchange reserves after the firm declared bankruptcy in order to pay for political donations, real estate purchases, and high-profile sponsorship deals.

Additionally, the government has provided copious evidence to back up its assertions, such as Signal communications and internal papers that, according to the prosecution, demonstrate how Bankman-Fried planned the use of client cash.

Cryptocurrency CEO Sam-Bankman Fried in History

Sam Bankman-Fried, often known online as “SBF,” is an entrepreneur in the financial and cryptocurrency sectors. He co-founded and served as the former CEO of the now-defunct cryptocurrency exchange FTX as well as the cryptocurrency trading firm Alameda Research. His personal net worth previously exceeded $26 billion, and he rose to notoriety as the leader of one of the biggest cryptocurrency exchanges in the world before his digital currency empire came to an abrupt stop in early November 2022.

After FTX failed earlier in the month as a result of a CoinDesk investigation revealing probable leverage and solvency issues regarding Alameda Research, Bankman-Fried left the firm, and the company filed for Chapter 11 bankruptcy on November 11, 2022.

Bankman-Fried was detained in the Bahamas, where FTX had its main office, and was later deported to the United States. The US filed various criminal fraud allegations against him. Damian Williams is the Southern District of New York’s attorney. The acts of Bankman-Fried were referred to by Williams as “one of the biggest financial frauds” in American history.

Bankman-Fried is charged with eight offenses by the federal prosecutor, in addition to front-running clients and manipulating the price of his exchange’s FTT token by the Commodity Futures Trading Commission (CFTC).

Caroline Ellison, the former CEO of Alameda Research, and Gary Wang, the co-founder of FTX, pleaded guilty to deceiving investors as part of a plea deal, U.S. Attorney Damian Williams announced this in a video released late on December 21. Bankman-Fried continues to insist that he didn’t do anything improper on purpose.

On December 22, he was freed after posting a record $250 million bail. According to the agreement between federal prosecutors and a federal judge in New York, the 30-year-old former crypto executive will reside with his Stanford law professor parents in Palo Alto, California, be restricted to the Northern California region, wear an electronic monitoring bracelet, and submit to mental health and substance abuse counseling.

Through October 2022, Bankman-Fried made no mention of any financial difficulties or significant bankruptcy danger for FTX. According to a study released on November 2, 2022, FTX primarily uses its own token, FTT, which it centrally controls, to store money.

In response to the information, the CEO of FTX competitor Binance declared on November 6 that he intended to liquidate all of his FTT holdings. The news and sales crushed the rest of the cryptocurrency markets in addition to driving down the price of FTT.

At the DealBook Summit on November 30, Bankman-Fried gave a detailed interview to New York Times columnist Andrew Ross Sorkin. She claimed that FTX’s demise was not the result of illegal conduct but rather shoddy accounting and a market meltdown. The former CEO said his participation at the summit was against the advice of his attorneys and that he did so virtually from FTX’s base in the Bahamas.

In general, Bankman-Fried pretended during the interview that he was unaware of what was happening between FTX and Alameda Research, its trading arm, and claimed that neither he nor an officer he designated supervised the compliance of the two entities—a mistake he said he now regrets. The former CEO denied doing so “knowingly” in response to Sorkin’s inquiry about whether Bankman-Fried mixed FTX and Alameda Research money.

Following the New York Times interview, Lawrence Lewitinn, the editor at large, questioned the validity of Bankman-Fried’s statement and asserted that the commingling of money is a planned act that doesn’t happen by mistake during an online panel debate on CoinDesk. “To combine finances, you must put in labor,” Lewitinn added.

Future circumstances are probably going to be challenging for Bankman-Fried and the FTX investors, who have lost billions of dollars. He was extradited to the United States from the Bahamas on December 21 after being accused by federal prosecutors of many fraud-related offenses. On December 22, he appeared before a federal judge in a court hearing where he was granted free on $250 million bail, the biggest ever. Investors and customers who lost money when FTX collapsed are unlikely to get it back.

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