FTX Founder SBF Claims Spending Client Funds Was Part of "Risk Management"

Sam “SBF” Bankman-Fried, the founder of the cryptocurrency exchange FTX, recently testified that spending client fiat deposits was part of “risk management” for his connected crypto hedge fund, Alameda Research. During his court testimony on October 31, SBF was asked by prosecutor Danielle Sassoon about the permissibility of using $8 billion of FTX clients’ fiat money. He responded, “I thought it was folded into risk management,” and went on to explain, “As CEO of Alameda, I was concerned with their portfolio. At FTX, I was paying attention but not as much as I should have been.”

SBF also confirmed that during his tenure as CEO of both FTX and Alameda, no individuals were terminated for allegedly using $8 billion worth of clients’ funds for speculative trading. When asked about specific employees, SBF replied, “I don’t remember knowing anything about particular employees.”

During the proceedings, Bankman-Fried also revealed that FTX, which is now defunct, had close connections with the government of the Bahamas, where the exchange was headquartered. Sassoon asked about providing the Bahamas Prime Minister with courtside seats at a Miami Heat game, to which SBF responded, “I don’t remember that.” Sassoon presented a message suggesting that the prime minister and his wife were in FTX’s courtside seats, to which SBF replied, “I don’t remember that.”

The testimony also suggested that SBF had discussions with the Bahamian Prime Minister, Philip Davis, regarding paying off the nation’s debt, although SBF denied it. However, he did acknowledge helping secure a job for Davis’ son.

FTX announced that it would make Bahamian users whole and prioritize their withdrawal requests just before the exchange’s collapse in November. The FTX trial is ongoing and expected to conclude by the end of the following week.

By Urik

My professional background is in public relations and I am the founder of Cryptochating. My journey into blockchain technology started four years ago, and I haven't looked back since then. The future of decentralized technology is incredibly fascinating to me, and I am passionate about communicating how it will change the world.

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