The criminal fraud trial of former crypto billionaire Sam Bankman-Fried continued Monday with a full day of cross-examination by the prosecution. At one point, Bankman-Fried acknowledged that Alameda Research could withdraw billions from the now-defunct crypto derivatives exchange FTX.
As the criminal fraud trial of Bankman-Fried, or SBF, as he is more popularly known in the crypto space, enters what many anticipated to be its last week, the crypto mogul may have admitted that Alameda Research, the crypto quantitative trading firm he founded in 2017, has an open credit line at FTX.
Just before the court took a break on Monday, the prosecution’s US Assistant Attorney, Danielle Sassoon, asked Bankman-Fried if he denied that “Alameda had some accounts with the Allow Negative flag,” to which SBF answered, “No.”
When UASA Sassoon asked again, “Do you deny that Alameda could withdraw billions without the risk of being liquidated?” Bankman-Fried responded, “That might be right.”
The prosecution’s lawyer, in an attempt to clarify the crypto mogul’s answer, asked again if the former FTX CEO was not denying that Alameda Research could withdraw billions, to which Bankman-Fried said, “I don’t deny it, no.”
Before his indirect admission about Alameda’s open line of credit at FTX, UASA Sassoon cited several instances of Bankman-Fried publicly stating that Alameda Research did not have special privileges and that the two firms are independent of each other.
During the cross-examination, UASA Sassoon also revealed that while Bankman-Fried may have played a part in advocating and supporting regulation for cryptocurrency, and quoted his previous tweet noting that regulation was “contingent on protecting customers.”
UASA Sassoon also referenced an exchange between Bankman-Fried and a reporter where the crypto mogul said, “fck regulators” and underlined his words that his advocacy was “just PR.”
AUSA: Did you say on Twitter that your support for regulation was contingent on protecting customers?
SBF: I don’t remember.
AUSA: But in private you said, F*ck regulators, right?
SBF: I said that once.
AUSA: You said it was P.R.
SBF: I said something like that— Inner City Press (@innercitypress) October 30, 2023
The prosecution also brought up another private conversation which showed that Bankman-Fried called customers “dumb mtherf**kers.”
AUSA Sassoon: You called people on Crypto Twitter “Dumb motherf*ckers”?
SBF: A subset of them, yes.
AUSA: Isn’t it true you thought that regulation would help you take market share from Binance?
SBF: That would be a pro. There were cons.— Inner City Press (@innercitypress) October 30, 2023
SBF denied the accusation and clarified that the comment was made for a certain “subset of them.”
There were also interesting revelations during the cross-examination, including Bankman-Fried admitting he did not know that Caroline Ellison would be cooperating with the government but suspected the government had a search warrant for his Google account.
Bankman-Fried also admitted in court on Monday that he saved Ellison’s guilty plea to his Google Drive and reviewed documents from Ellison’s Google Drive.
AUSA Sasoon: Look at this, The Fantastic Three… You did not know that Caroline Ellison would be cooperating with the government, correct?
SBF: Yes.
AUSA: You didn’t know the government had a search warrant for your Google account?
SBF: I suspected.— Inner City Press (@innercitypress) October 30, 2023
SBF has pleaded not guilty to seven counts of federal fraud and conspiracy related to the collapse of FTX and Alameda Research. Last week, he admitted committing “a number of mistakes,” but denied any allegations of fraud.
