With FTX he founded one of the largest trading platforms for cryptocurrencies. Now Sam Bankman-Fried is on trial: He is said to have siphoned off billions from customers. The defendant is “very surprised”.
In his fraud trial, former star entrepreneur Sam Bankman-Fried blamed former associates for the collapse of the cryptocurrency exchange FTX. Bankman-Fried told a jury in New York that he only partially understood the financial situation of his companies, as US media reported from the court. He was “very surprised” by the extent of the problems when he found out in October 2022 that his hedge fund Alameda Research had around $8 billion in debt to FTX.
Companions such as Alameda boss Caroline Ellison, on the other hand, testified in the trial that Bankman-Fried made the decisions and wanted to conceal the companies’ financial situation.
The US justice system accuses Bankman-Fried of diverting billions from the assets of FTX customers without their knowledge in order to finance, among other things, risky transactions by Alameda Research. When these deals went wrong, FTX was also caught in the vortex. According to the indictment, Bankman-Fried is said to have ensured that Alameda was able to borrow money from FTX without providing the usual collateral. He refers to decisions made by others.
If convicted, the 31-year-old faces a long prison sentence. In the worst case scenario, it could be more than 100 years in prison.
Before the collapse, FTX was one of the largest trading venues for cryptocurrencies like Bitcoin. In December, Bankman-Fried was arrested in the Bahamas. FTX had its headquarters there.