Sam Bankman-Fried (SBF), the founder of cryptocurrency exchange FTX, claims that spending customers’ fiat deposits is just part of the “risk management” of his cryptocurrency hedge fund Alameda Research.
Former crypto executive in court witness On October 31, Danielle Sassoon, the prosecutor for the Southern District of New York, asked SBF whether it believed that $8 billion in fiat currency from FTX customers could be spent. “I think it’s built into risk management,” he said. “As CEO of Alameda, I care about their portfolio. At FTX, I care about it too, but not to the extent that it should.”
According to SBF, during his tenure as CEO of FTX and Alameda, no one was fired for allegedly misappropriating $8 billion worth of client funds for speculative trading. “I don’t recall knowing anything about specific employees,” SBF responded to Sassoon’s question.
Bankman-Fried also revealed during the proceedings that the now-defunct exchange was based in the Bahamas and had close ties to the island nation’s government. “You gave the Prime Minister of the Bahamas a floorside seat at Miami Heat Arena,” Sassoon asked. “I don’t remember,” SBF replied. “Here’s the message, you said he and his wife were sitting courtside at FTX,” Sassoon said.
The SBF is said to have discussed repaying Bahamian debt with Bahamian Prime Minister Philip Davis. Although the cryptocurrency executive denied this, he admitted to helping Davis’ son find a job.
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Just before the exchange collapsed last November, FTX announced that it would reinstate Bahamas users and would prioritize their withdrawal requests. The FTX trial is still ongoing and is expected to wrap up by the end of next week.
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