Sam Bankman-Fried Betrays His Own In New Trial

Sam Bankman-Fried, the former CEO of FTX, recently took the stand in his criminal fraud and conspiracy trial, where he made some eye-opening revelations.  we break down the key points from his testimony and the shocking details that emerged during the trial.

Bankman – Fried’s Admission of Mistakes

During his testimony, Sam Bankman-Fried openly admitted to making mistakes at FTX, the now-fallen crypto exchange. The most significant blunder he acknowledged was not having a risk manager, a crucial role in any financial institution. He emphasized that these errors had real consequences, stating, “a lot of people got hurt.”

Blame-Shifting to Deputies

Under questioning from his defense lawyer, Sam Bankman-Fried attempted to deflect blame onto his subordinates. He argued that it was not his actions but those of his deputies that led to FTX’s downfall. This strategy involved highlighting the mistakes made by individuals within the organization.

Alameda Research’s Role

One of the most shocking revelations was Bankman-Fried’s claim that he had asked Alameda Research, a hedge fund closely tied to FTX and led by his former girlfriend, Caroline Ellison, to hedge its risks. However, when questioned about whether Ellison followed his advice to “get shorter” to reduce risks, Bankman-Fried tersely replied, “no.”

The “Allow-Negative” Feature

Bankman-Fried also addressed the controversial “allow-negative” feature in FTX’s software, which allowed Alameda to avoid liquidation and maintain a negative balance. He shifted blame for this feature to his former colleagues, Gary Wang and Nishad Singh, who he claimed had implemented it in response to his vague guidance to fix a risk-management system bug.

The “New York Times Test”

Bankman-Fried’s testimony included an explanation for the deletion of communications within the company. He mentioned the “New York Times test,” which he claimed was a reference to a practice at Jane Street, an elite quantitative trading firm. According to him, it involved being cautious about what was put in writing, as it could potentially end up on the front page of The New York Times, even if seemingly innocuous.

Clawing Back Funds and Borrowing

The trial also delved into the propriety of Alameda’s borrowing from FTX and the exchange’s ability to “claw back” funds from users to cover losses. Bankman-Fried asserted that Alameda’s borrowing practices were in line with standard procedures and that the clawback policy was specific to a margin trading feature used by a small number of users.

Personal Insights

Bankman-Fried’s testimony offered personal insights, such as his choice of clothing and appearance. He contradicted previous testimonies from former colleagues, asserting that his schlubby look was a matter of comfort, and his long hair was due to a busy lifestyle.

FTX’s Marketing Decisions

The trial also touched on FTX’s marketing decisions, including the sponsorship of the Miami Heat’s arena. Bankman-Fried justified the $10 million annual expenditure by explaining that it represented only 1% of FTX’s revenue at the time.

The Judge’s Rulings

Before Bankman-Fried’s testimony, the judge allowed testimony about FTX lawyers’ role in deleting internal communications but restricted the defense from discussing FTX’s lawyers more broadly. This decision limits the extent to which Bankman-Fried can shift blame to the legal team.


Sam Bankman-Fried’s testimony has unveiled several shocking details about FTX’s collapse, risk management, and the blame-shifting tactics employed during the trial. As the trial continues, more revelations may come to light, shedding further light on the high-profile case.

By Ryan

Ryan is an author at CryptoPresales, With his expertise in the crypto industry, Ryan shares his insights on various aspects of the blockchain ecosystem, including token sales, decentralized finance, and emerging trends.