Sam Bankman-Fried took the stand this week in his criminal trial, denying any wrongdoing between FTX and Alameda Research while acknowledging making “big mistakes” during the companies’ fast growth. Highlights from his testimony include refuting claims he directed millions in political donations, explaining Alameda’s unique role as a liquidity provider and client of FTX, failing to implement hedging strategies, and FTX’s terms covering customer losses.
During his testimony, Bankman-Fried denied instructing former executives Ryan Salame and Nishad Singh to funnel millions to political campaigns in 2021. He claimed FTX had over $1 billion in revenue that year and donations came from the exchange’s funds. Bankman-Fried also discussed Alameda’s line of credit, role as a liquidity provider if FTX’s risk engine failed, and ability to borrow funds as an FTX client.
Bankman-Fried further revealed asking Alameda CEO Caroline Ellison to hedge risks in 2021 and 2022, but the strategies were never implemented. Without hedges in place, Alameda suffered significant losses in 2022 leading to its liability with FTX ballooning to over $8 billion. Lastly, he stated FTX’s terms of use included a clawback provision to socialize customer losses if the platform could not cover them.
#SamBankmanFried #FTXtrial #AlamedaResearch
