FTX’s Sam Bankman-Fried denies defrauding customers

New York — Sam Bankman-Fried, testifying in his own defence at his fraud trial on Friday, acknowledged that a “lot of people got hurt” when the FTX cryptocurrency exchange he founded collapsed but said he did not defraud anyone or steal customer funds.

Shortly after taking the witness box in Manhattan federal court, Bankman-Fried said he made many mistakes while running the now-bankrupt exchange, mainly by not implementing a dedicated risk management team.

“We thought that we might be able to build the best product on the market,” Bankman-Fried said. “It turned out basically the opposite of that. A lot of people got hurt, customers, employees, and the company ended up in bankruptcy.”

His testimony marked the first time the 12 jurors and five alternates are hearing directly from the 31-year-old former billionaire after 12 trial days.

Prosecutors accuse Bankman-Fried of using FTX customer funds to prop up his crypto-focused hedge fund, Alameda Research, make speculative venture investments and donate more than $100m to US political campaigns. He also faces charges of scheming to cheat Alameda's lenders and FTX investors.

He has pleaded not guilty.

Bankman-Fried’s trial, which began on October 3, is drawing to a close nearly a year after FTX collapsed amid a wave of customer withdrawals. The company declared bankruptcy in November 2022 and Bankman-Fried was indicted the following month.

Reuters