Sam Bankman-Fried acknowledges ‘mistakes’ but testifies he did not defraud anyone

NEW YORK -Sam Bankman-Fried, testifying in his own defense at his fraud trial on Friday, acknowledged that a “lot of people got hurt” when the FTX cryptocurrency exchange he founded collapsed, but said he did not defraud anyone or take customer funds.

Shortly after taking the witness stand in Manhattan federal court, Bankman-Fried said he made “a number of small mistakes and a number of larger mistakes” while running the now-bankrupt exchange. The biggest mistake, he said, was not implementing a dedicated risk management team.

“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. A lot of people got hurt, customers, employees, and the company ended up in bankruptcy.”

His testimony marked the first time the 12 jurors and five alternates are hearing directly from the 31-year-old former billionaire after 12 trial days.

Prosecutors accuse Bankman-Fried of using FTX customer funds to prop up his crypto-focused hedge fund, Alameda Research, make speculative venture investments and donate more than $100 million to U.S. political campaigns. He also faces charges of scheming to cheat Alameda’s lenders and FTX investors.

He has pleaded not guilty.

Bankman-Fried’s trial, which began on Oct. 3, is drawing to a close nearly a year after FTX collapsed amid a wave of customer withdrawals. The company declared bankruptcy in November 2022 and Bankman-Fried was indicted the following month.

Jurors have heard from three of his closest confidantes at FTX and Alameda, all of whom have pleaded guilty and agreed to cooperate with prosecutors. They testified earlier this month that they committed financial crimes at Bankman-Fried’s behest.

For criminal defendants, taking the stand is a risky proposition because it opens them up to potentially probing cross-examination by prosecutors.

But given Bankman-Fried’s penchant for risk, he likely viewed taking the stand as his best shot to counter the accounts from the three former members of his inner circle, which were backed up by spreadsheets they said demonstrated how customer funds were stolen and text messages where they discussed FTX’s shortfall of funds with Bankman-Fried.

(Reporting by Jody Godoy and Luc Cohen in New York; Editing by Daniel Wallis)