On Monday, October 30, Chief Executive Officer and founder of the defunct cryptocurrency exchange FTX, Sam Bankman-fried‘s credibility was bombarded in cross-examination on days before the exchange’s bankruptcy by a federal persecutor as he took his stand for a second day of testimony in the federal court.
Federal Persecutor Questions Sam Bankman-Fried
Amid the heyday of the cryptocurrency exchange FTX, CEO Sam Bankman-Fried, mostly engaged the public in a relentless barrage of tweets, TV appearances, and statements in front of the congress. However, it seems those moments and statements have come to haunt Bankman-Fried as he testifies at his fraud trial in Manhattan, New York.
During the Monday cross-examination that lasted for over 4 hours, assistant US. Attorney Danelle Sassoon confronted Sam Bankman-Fried with a series of questions about his lack of consistency between his public pronouncements and how he managed his crypto firm before it filed for bankruptcy in November.
The federal persecutor also approached Sam with moments that saw the CEO making promises to customers, assuring them of the safety of their assets and they are obliged to demand the return of those assets at any time.
However, Sam’s answers to the persecutor’s questions remained ambiguous as he answered all of the questions with “Yep.” He further insisted that he does not remember much of his public statements including about the exchange’s handling of customers’ assets and the dispute of interest that affected his businesses.
During Sassoon’s line of questioning, she tried to show that Bankman-Fried was a fraud and that his public pronouncements were false. The ADA showed that he promised the safety of customers’ assets in public, but instead, he looted customers of their funds, spending lavishly on real estate, investments, celebrity-laden promotions, and political contributions.
Prior to the cross-examination, Sam Bankman-Fried had testified that he believed his companies were able to execute daily withdrawals of billions of dollars in assets until a few days before they could not.
Sam Bankman-Fried On Alameda
The US Attorney also questioned Sam about interviews he did before FTX’s collapse, during which he maintained that Alameda was not entitled to any special treatment as a customer trading on the exchange. The prosecution’s witnesses stated during the first three weeks of the trial that Bankman-Fried had directed billions of dollars toward Alameda, not the other way around.
SBF then admitted that Alameda had a $65 billion credit line with FTX, which initially allowed it to borrow unlimited funds. Meanwhile, the exhcange’s second-largest credit line with another firm was $150 million.
However, Bankman-Fried repeatedly stated that he was unable to recall several statements he had made regarding FTX and Alameda that had been attributed to him by reporters. According to him, he did not read through all the articles and often disagreed with the reporting.
Sassoon also questioned Bankman-Fried while offering a specific example of using profanity when discussing regulators, even as he was attempting to persuade Congress to establish a regulatory framework that would give the cryptocurrency industry substantial legitimacy. The CEO answered saying “I said that once.”
She also asked Sam if his pursuit of regulations was just a mere effort to get positive public relations, and he responded, “I said something related to that, yes.”
