2023-10-28 23:00 |
The former CEO of the defunct crypto exchange FTX, Sam Bankman-Fried (SBF), took the stand once again on October 27. This time, it was in front of the jury as Bankman-Fried had a lot to say about what went on at his former company, including revelations about how he planned to sell the exchange to its one-time competition, Binance.
Why Sam Bankman-Fried Wanted To Sell FTX To BinanceAccording to a live report by CNN, SBF stated that he saw himself selling FTX to Binance when he and co-founder Gary Wang first started it in 2019 due to the number of crypto exchanges that already existed and the fact that he had no idea of how the company was going to get customers.
However, that idea was quickly shut down as Binance is said to have used an internal team to build its exchange platform. Following this, Sam Bankman-Fried noted that he was more motivated than ever to build something out of FTX despite the initial challenge of growing its customer base.
In the weeks after that, the defendant began to feel more hopeful and felt there was a “20% of success,” which he saw as “a huge opportunity” considering the profitability that the biggest exchanges enjoyed.
FTX went on to become one of the biggest exchanges, even surpassing the second-largest crypto exchange by trading volume, Coinbase, at some point. While on the stand, Bankman-Fried revealed that he felt the “design philosophies” of some exchanges then “didn’t make a lot of sense,” so the exchange capitalized on that to create a niche for itself.
The crypto exchange was seen as more alluring to high-volume traders due to its cheaper trading fees and the fact that the crypto exchange had a more advanced risk engine. The risk engine (which was responsible for liquidations) considered the trader’s account (rather than just a particular trade) whenever it liquidated a customer’s position.
Bankman-Fried Sticks To His StoryMeanwhile, SBF, who has continued to deny any wrongdoing in how he ran FTX and Alameda Research, once again stated on the stand that he didn’t defraud customers. The defendant responded in the negative while replying to a question from his primary counsel, Mark Cohen, on whether he defrauded anyone or not.
While giving his testimony, Sam Bankman-Fried sought to counter the testimonies of witnesses like Wang, Caroline Ellison, and Nishad Singh, as he suggested that they had more leeway than they seemed to have suggested. His close associates had earlier heaped all the blame on the defendant by suggesting that they simply followed Bankman-Fried’s orders as he was totally in control.
Ellison, in particular, had accused Bankman-Fried of directing her to commit the crimes when she used FTX customers’ funds to repay lenders and for other purposes. However, SBF noted that Caroline was the one in charge of Alameda Research and that she even declined when he asked her if she wanted another co-CEO after Sam Trabucco resigned.
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