Sam Bankman Fried Testimony Reveals Limited Crypto Knowledge

Sam Bankman Fried’s Candid Admission About Cryptocurrency

In a surprising turn of events during his fraud trial, FTX founder Sam Bankman Fried openly admitted that he had little knowledge of cryptocurrency before launching his ambitious venture. This revelation sheds light on the early days of FTX and its closely affiliated hedge fund, Alameda Research.

Prosecutors Accuse Bankman Fried of Diverting Customer Funds

Prosecutors have alleged that Bankman Fried funneled billions of dollars in FTX customer funds into Alameda Research for personal gain. Throughout the trial, Bankman Fried vehemently denies any wrongdoing, stating that he was unaware of the intricacies of cryptocurrencies.

A Humble Beginning for FTX

During his testimony, Bankman described his initial exposure to cryptocurrencies, saying, “I had absolutely no idea how they worked. I just knew they were things you could trade.” His testimony highlighted the gaps in his knowledge and how he identified an opportunity in the crypto market.

The Uncertain Road Ahead

When Bankman co-founded FTX with Gary Wang, they faced considerable uncertainty. He recalled, “We had no idea at all how we’d get customers.” This uncertainty underscores the challenges they encountered while trying to establish FTX as a prominent cryptocurrency exchange.

The CEO’s Demanding Role

As the trial proceeded, defense attorney Mark Cohen aimed to illustrate Bankman-Fried’s immense workload as CEO of FTX. Cohen questioned the magnitude of FTX’s growth since its inception in 2019. Bankman-Fried admitted, “Absolutely not,” when asked if he expected such rapid expansion.

Lack of Risk Management

The lack of a risk management department within FTX during its early days became another focal point. When asked if the company had a risk management department at that time, Bankman-Fried responded, “We sure should have but no, we did not.”

Overwhelming Work Hours and Communication

Cohen delved into the demands placed on Bankman-Fried’s shoulders. Bankman-Fried disclosed that he worked extensively, with long hours varying from 12 to 22 hours per day. His email correspondence was equally daunting, with thousands of emails arriving daily, making it challenging to manage. He even shared his goal of reducing his inbox to 60,000 unread messages, albeit with limited success.