SBF Testifies on Use of $8 Billion Client Funds as Risk Management

On October 31, Sam Bankman-Fried, commonly known as SBF, the co-founder and former CEO of the now-defunct cryptocurrency exchange FTX, testified in court that the utilization of clients’ fiat deposits was a component of “risk management” for his associated crypto hedge fund, Alameda Research. The court hearing took place on 31 October, where SBF was questioned by prosecutor Danielle Sassoon from the Southern District of New York.

During the court proceedings, Sassoon inquired if SBF considered it acceptable to use $8 billion of FTX customers’ fiat funds. SBF responded, “I thought it was folded into risk management.” He further elaborated that while he was deeply involved in Alameda’s portfolio, his focus on FTX was not as stringent as it should have been.

According to a report by Cointelegraph, SBF also stated that during his time as the CEO of both FTX and Alameda Research, no staff members were terminated for allegedly diverting $8 billion of client funds for speculative trading activities. When questioned about his awareness of specific employees involved, SBF stated, “I don’t remember knowing anything about particular employees.”

SBF also revealed that FTX, which was based in the Bahamas, maintained a close relationship with the government of the island nation. Sassoon questioned SBF about providing the Bahamian Prime Minister, Philip Davis, with premium seats at the Miami Heat Arena. SBF claimed not to recall the event, but Sassoon presented a message indicating that Davis and his wife were in FTX’s courtside seats.

SBF is also alleged to have discussed settling the national debt of the Bahamas with Prime Minister Davis. While SBF denies these claims, he did admit to assisting Davis’ son in securing employment.

Before shutting down last November, FTX assured its Bahamian users that their withdrawal requests would be prioritized. The ongoing trial concerning FTX is anticipated to conclude by the end of next week.

Source: Read Full Article