FTX’s Bankman-Fried admits ‘mistakes’, denies fraud at trial

Sam Bankman-Fried says he never set out to steal from people while testifying in his own defence in Manhattan court.

FTX founder Sam Bankman-Fried has admitted to making mistakes but denied defrauding customers while testifying in his own defence at his high-profile fraud trial in New York.

Bankman-Fried said on Friday that a “lot of people got hurt” when FTX collapsed last year, but he had never set out to steal from people.

“We thought that we might be able to build the best product on the market,” Bankman-Fried said during six hours of testimony in a Manhattan federal court. “It turned out basically the opposite of that.”

Under questioning from his lawyer, Bankman-Fried depicted himself as a bumbling visionary who was swamped with work and knew little about the cryptocurrency industry before founding FTX in 2019.

“I made a number of small mistakes and a number of large mistakes,” he said. “By far, the biggest mistake was that we didn’t have a team dedicated to risk management.”

Bankman-Fried, once one of the most feted figures in cryptocurrency, is alleged to have used FTX funds for risky trading by his hedge fund Alameda Research.

The former billionaire has been charged with seven counts of fraud, embezzlement and criminal conspiracy, and could face decades in prison if convicted.

He has pleaded not guilty to all charges.

On Friday, Bankman-Fried, who has blamed ex-colleagues for FTX’s sudden implosion, took aim at his ex-business partner and former girlfriend Caroline Ellison, who testified on behalf of the prosecution.

Bankman-Fried said he had instructed Ellison to ensure that Alameda hedge itself financially against a possible plunge in the cryptocurrency market, but she was “less enthusiastic than I was” and never put safeguards in place.

Ellison, who has pleaded guilty to fraud charges and is cooperating with the prosecution, has testified that Bankman-Fried was involved in all major decisions.

Bankman-Fried is expected to face cross-examination by government prosecutors on Monday.

His decision to testify in his own defence is unusual in the United States, where suspects are typically advised against taking the stand due to the risk of self-incrimination.