FTX founder Sam Bankman-Fried claimed that the misplacement of billions of consumers' money was apart of 'risk management' as the trial intensifies on Oct 31st. At the time of the company's bankruptcy, FTX faced a shortfall of $8 billion owed to its customers.
Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, is currently under investigation for seven criminal charges of fraud. On October 31st, he claimed that spending the FTX customers' money was part of the company's 'risk management'.
A new article reported that Prosecutor Danielle Sassoon of the Southern District of New York asked FTX founder Sam Bankman-Fried if he believed it was permissible to spend $8 billion of FTX customers' fiat money. In response to this question, the former CEO said "I thought it was folded into risk management. As CEO of Alameda, I was concerned with their portfolio. At FTX, I was paying attention but not as much as I should have been." No individuals were fired for allegedly siphoning $8 billion worth of clients' money for speculative trading. "I don't remember knowing anything about particular employees," said Sam Bankman-Fried.
FTX had its headquarters in the Bahamas and had close ties with the island country's government. Prosecutor Sassoon questioned SBF about the relationship the company had with the government. "You gave the Bahamas prime minister floor side seats at the Miami Heat Arena," asked Sassoon. "I don't remember that," replied SBF. "Here's a message where you say he is in FTX's courtside seats with his wife," said Sassoon. Fried admits to helping Bahamian Prime Minister Philip Davis' son secure a job. FTX showed priority of its Bahamian users by announcing that they would be made whole and would process their withdrawal requests in priority.
The indictment on Bankman-Fried with seven counts of fraud and conspiracy over the November 2022 collapse of FTX, which is now bankrupt. Prosecutors accused him of stealing billions of dollars in FTX customer funds to plug losses at his hedge fund, Alameda Research, according to the news article. The Bahamas objected to him being tried on the court of conspiring to violate U.S. campaign finance laws, but prosecutors with the U.S. Attorney's office in Manhattan said they would nevertheless seek to show that the $100 million Bankman-Fried allegedly donated to U.S. political campaigns and causes was part of his wider-ranging fraud scheme.
