SBF Testifies in Hearing, Claims Alameda Research had Right to “Borrow” Funds

Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Last updated:
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Author
Julia Smith
Author Categories
About Author

Julia is an experienced editor with a passion for covering a wide variety of beats. She loves all things politics and regularly covers regulatory updates on emerging technology here for Crypto News.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more

.

Disgraced FTX founder Sam Bankman-Fried took the stand for the first time in his landmark fraud trial without the jury present.

With numerous pieces of evidence and lines of testimony in contention between the prosecution and the defense, Judge Kaplan sent the jury home early Thursday in order to hammer out which arguments may be presented to them.

A missing piece of evidence

In the defense’s direct examination, Bankman-Fried admitted to using encrypted messaging due to “security threats” and being concerned about “potentially vulnerable” information being leaked.

“There were constant attempts to hack FTX,” Bankman-Fried said.

Moreover, Bankman-Fried revealed that FTX had a document retention policy that required certain information to be maintained or deleted. He then testified that he believed he acted in accordance with this policy when he “toggled on” Signal’s auto-deletion feature. However, he “proactively disabled” this feature “for a variety of reasons I understood to be coming from regulators” following FTX’s collapse.

When Judge Kaplan questioned where a copy was of this document, the prosecution revealed they did not have it, despite Bankman-Fried centering much of his testimony around it.

Terms of service controversy

Moreover, he stated that FTX had a difficult time getting a bank account and was required to use Alameda Research and its subsidiaries as part of a “payment agent agreement.”

Bankman-Fried further testified that Alameda Research was permitted to borrow FTX funds according to the company’s terms of service “in many circumstances.”

However, he admitted that he “skimmed” over parts of FTX’s terms of service while largely placing responsibility on FTX’s general counsel.

When the prosecution pushed for specific details regarding what conversations Bankman-Fried may have had with his legal counsel, Bankman-Fried skirted around the questions.

Bankman-Fried’s long-awaited cross-examination

Assistant U.S. Attorney Danielle Sassoon put on an impressive hours-long cross-examination that saw Bankman-Fried hesitate over contentious lines of testimony.

When asked if Alameda Research was permitted to use customer funds, Bankman-Fried stated, “I wouldn’t phrase it that way, but if that’s the question you’re asking, then yes.”

When Judge Kaplan sustained an objection from the defense against the prosecution asking whether it was okay to embezzle customer funds, Bankman-Fried continued on by stating it wasn’t. When Judge Kaplan informed him he didn’t need to answer the question, the fallen “king of crypto” said, “I felt like I had to answer that one.”

Moreover, throughout Bankman-Fried’s testimony, Judge Kaplan became upset over the defendant’s use of “vague generalities” without straightforwardly answering the question.

In a particularly tense moment, Judge Kaplan demanded Bankman-Fried to  “listen to the question and answer the question directly.”

At one point, Kaplan stated that “the witness has what I’ll simply call an interesting way of answering questions.”

Bankman-Fried’s formal testimony is expected to begin in front of the jury when the trial reconvenes tomorrow morning.

More Articles

Blockchain News
Swedish Payments Group Klarna Sets Sights on Crypto Ahead of Public Listing
Shalini Nagarajan
Shalini Nagarajan
2025-02-10 07:30:29
Finance News
Consumer Financial Protection Bureau Funding and Activities Suspended by New Head
Ruholamin Haqshanas
Ruholamin Haqshanas
2025-02-10 06:53:26
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors