In a recent development in the ongoing criminal trial of Sam Bankman-Fried, the former CEO of FTX, he denied any knowledge of fraudulent activities at the crypto exchange. Testifying for the first time, Bankman-Fried suggested that the responsibility for creating the controversial “allow negative” button at Alameda Research, a crypto hedge fund, lay partly with the former chief technology officer, Wang.
Bankman-Fried revealed that he wasn’t fully aware of the implications of the “allow negative” button, which allowed Alameda Research to trade more funds than it actually had available. He stated that he believed the funds were either held in a bank account or sent to FTX in stablecoins. Any discrepancies, he assumed, would be reflected as a negative number on FTX.
Criticism and Contradictions in Sam Bankman-Fried’s Testimonies
Regarding his former colleagues, Bankman-Fried praised Caroline Ellison and Sam Trabucco as “a good team” but criticized Ellison’s lack of software development skills. This statement contradicts Ellison’s testimony, where she claimed that SBF asked her to stay on as CEO due to concerns about the firm’s financial health.
These testimonies clash with the accounts given by Wang and Ellison earlier. Wang asserted that Bankman-Fried had instructed him to implement the “allow negative” feature in 2019, while Ellison revealed SBF’s efforts to keep her as CEO, citing potential rumors about the firm’s financial stability.
The criminal trial, which commenced on October 3, is expected to conclude within a few business days. After the completion of defense questioning on October 30, the Justice Department will cross-examine Sam Bankman-Fried. Following this, the jury will deliberate on the seven charges.
Notably, Sam Bankman-Fried is slated to face five additional criminal counts in a second trial scheduled for March 2024. He has pleaded not guilty to all charges in both cases. The crypto community eagerly awaits further developments in this high-profile case.