Sam Bankman-Fried Says He Made ''Small'' And ''Large'' Mistakes, Only Called Some Of The Shots As FTX CEO

Sam Bankman-Fried Says He Made ”Small” And ”Large” Mistakes, Only Called Some Of The Shots As FTX CEO

Updated: 31 October 2023

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FTX founder Sam Bankman-Fried said he made “small” and “large” mistakes and that he had only called some of the shots as CEO of the bankrupt crypto exchange he founded, but denied allegations of defrauding customers.

Under questioning by his defence attorney, Mark Cohen, Bankman-Fried said one of his biggest oversights was the absence of a dedicated risk management team.

“We sure should have had one, but no, we did not,” he said.

Bankman-Fried Had ‘No Idea’ How Crypto Worked

Bankman-Fried seemed to want to portray himself as an earnest visionary who was overwhelmed with tasks and had limited knowledge about the cryptocurrency industry prior to establishing FTX in 2019.

“I had absolutely no idea how they worked,” he said. “I just knew they were things you could trade.” .

Cohen portrayed him as a young executive who “made mistakes” while navigating the challenges of leading a rapidly expanding venture.

On Friday, Bankman-Fried had said that “many people got hurt” when FTX experienced a collapse last year. He clarified that he never intended to defraud any of them.

“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.”

For the first time in the trial, the jury heard from Sam Bankman-Fried directly.

Early in his testimony, he copped to making “a number of small mistakes and a number of large mistakes”—the largest of which, he said, was not hiring a risk-management team. https://t.co/AYthf6KHhZ

— The Daily Beast (@thedailybeast) October 27, 2023

Bankman-Fried Only Called Some of the Shots As CEO

Assistant US Attorney Danielle Sassoon subjected Bankman-Fried to a rapid-fire cross-examination, probing the contrast between his role as FTX CEO and his public statements to the media and Congress.

When asked if he called the shots as CEO, Bankman-Fried’s response was that he “called some of them.”

In response to the prosecution’s relentless questioning, he often offered vague or forgetful responses, drawing reprimands from Judge Lewis Kaplan for not providing direct answers to the inquiries.

Blame Game and Partner Dynamics

Bankman-Fried sought to shift some responsibility for the company’s collapse to his former girlfriend and FTX-affiliated hedge fund manager, Caroline Ellison.

He highlighted that she did not hedge Alameda Research funds against potential losses, a move he claimed could have mitigated the impact of the crypto market crash in 2022.

Bankman-Fried testified that despite numerous conversations about hedging, Ellison consistently rejected the idea, leading to concerns about Alameda’s risk exposure.

Bankman-Fried’s testimony follows 12 days of evidence presented by the prosecution in a federal court in Manhattan. This included testimonies from his previous business associates and his ex-girlfriend, Ellison, who led the FTX-associated hedge fund Alameda Research.