In his own review, his hedge fund, Alameda Research, learned only that he spent $8 billion in client deposits from his crypto trading platform, FTX, by eavesdropping on conversations among his employees in September 2022. When he confronted them, he said. They were told to stop asking questions and that they were busy.
“I don’t know if it’s right or wrong or good or bad, and I’m not particularly trying to assign blame for it,” said Bankman-Fried, speaking at the end of two days of Daniel’s trial by federal prosecutors. Sassoon.
Bankman-Fried’s version of events is starkly different from the story told by three of her former top deputies in the opening weeks of the trial. They said they committed financial crimes at his direction in testimony they gave under a cooperation agreement with the government.
Bankman-Fried said Tuesday that Alameda did not seek to hold employees accountable after learning that FTX had spent billions of dollars in customer deposits. Asked if he had fired anyone from the trading company he believed responsible, Sassoon said, “No.”
Sassoon also attacked Bankman-Fried about his relationship with Bahamian government officials, which he described as “cheesy”, showing private messages from the jury where the Bahamian prime minister allowed FTX to use court Miami Heat tickets.
Bankman-Fried even joked in a group chat with his associates that one of his top lieutenants, Ryan Salem, was an effective member of the Bahamian government.
Bankmann-Fried was asked the question after a tough Monday, during which she battled through four hours of grilling by Sassoon. On Tuesday, he continued to try to address questions about his conduct and to sort out the contradictions between public and private opinion.
But Sassoon has been marshalling prosecutors’ records to get some damaging admissions. These include evidence that the former crypto mogul has developed a modest, classy persona that hides his appetite for luxury and disdain for colleagues, followers and policymakers.
Sassoon noted Monday that Bankman-Fried spent about $15 million on private jet travel, and he acknowledged authorizing private planes to fly Amazon packages to FTX’s offices in the Bahamas. Another revelation: the private message that Bankman-Fried dismissed government regulators with a ferocity, even as he publicly believed a subset of his followers to be “dumb mother—–s.”
Under her questioning, Bankman-Fried agreed On Tuesday, his hedge fund, Alameda Research, enjoyed special privileges trading on FTX — including an exemption from auto-liquidation rules imposed on $65 billion in debt and other clients — despite his repeated public guarantees. He admitted that he often risked the health of his businesses to maximize potential profits — an underlying theme of his testimony and trial.
Federal prosecutors allege Bankman-Fried masterminded one of the largest financial frauds in history by stealing $10 billion in FTX client money to pay for risky venture investments, lavish real estate purchases and dark money political contributions. He pleaded not guilty to seven counts of fraud and conspiracy. If convicted, he faces decades in prison.
In rebuttal testimony led by her attorney after cross-examination, Bankman-Fried tried to paint a more sinister picture of her behavior. The Alameda account used only $2 billion in its credit line, and he justified private jet travel as a reasonable business expense, saying commercial flights from the Bahamas were often delayed.
He joked about a photo Sassoon showed the jury of him sleeping on a private jet, calling it “very flattering.”
It’s unclear whether Bankman-Fried’s own retelling of the events leading up to FTX’s bankruptcy resonated with jurors. During cross-examination Monday, a juror raised eyebrows when Bankman-Fried stumbled through a statement that contradicted an answer she had given moments earlier. When Sassoon presented the evidence, jurors often appeared more engaged than they did in weeks when the balance sheets were shown, putting down their notes to follow the brisk exchanges.
After the defense’s objection, Judge Louis A. Kaplan sent the jury home. Kaplan and attorneys will spend Tuesday discussing the instructions they will read to jurors, which will begin Thursday, after the government and defense make their closing arguments. The trial is likely to continue as early as next week, Kaplan said.
Neumeier reported from Washington.
