SBF blamed top FTX executives on his second day of testimony, and lawyers disputed his answers using his own emails, DMs, tweets, and more; some were profane

- FTX founder Sam Bankman-Fried resumed his testimony on Monday as his criminal trial nears its end.

CNBC 2023-10-31 MacKenzie Sigalos

Context & Ripple Effects

The testimony follows evidence that Alameda had a $65 billion line of credit unavailable to other users, framing the trial around who understood and controlled the relationship between the two firms.

Bankman-Fried's account that he knew only parts of the companies' finances—and was surprised by the balance-sheet gap—had already become a central defense theme in his earlier testimony on FTX's financial state.

First-order effects

Lawyers can use Bankman-Fried's own communications to test his effort to assign responsibility to other FTX executives, putting his credibility directly before the jury.
The defense's account of fragmented internal knowledge is pressured when contemporaneous emails, DMs, and public posts appear to conflict with his courtroom answers.

Second-order effects

The case shifts attention from broad claims of poor oversight to the documentary record of what senior leaders communicated and when, raising the stakes for testimony from other FTX insiders.
A credibility contest over internal messages makes the defense's lack-of-risk-management framing—its argument that FTX had no chief risk officer—less persuasive if jurors see evidence of more direct executive awareness.

Third-order effects

If courts continue to treat internal chats and public statements as central evidence of executive knowledge, crypto-platform leaders will face stronger incentives to formalize decision-making, risk reporting, and record retention.
The FTX case reinforces that weak governance and privileged affiliate access can become inseparable in legal scrutiny, not merely operational shortcomings.

The trend: Crypto-platform failures are increasingly being examined through the traceable communications, governance controls, and personal accountability of their executives.

Discussion

@innercitypress @innercitypress on x
AUSA Sassoon: You were the only member of the board of directors of Alameda Research Limited? SBF: This makes it seems I was as of them. It wasn't my intention to be. Judge Kaplan: You owned 90% of the stock. Is it your position you became director by mistake?
@innercitypress @innercitypress on x
SBF: I was concerned about a run on the bank. Cohen: What is that? SBF: Say you have a bank — AUSA Sassoon: Objection. Judge Kaplan: Sustained.
@innercitypress @innercitypress on x
Cohen: You tweeted that “assets are fine.” What did you mean? SBF: My view was that the exchange was OK, no hole in terms of assets. Cohen: You said here, FTX will continue to process withdrawals... SBF: FTX did no investment with customer assets.
@caspiancey H.E. Cas Piancey on x
Lmfao “You owned 90% of the stock. Is it your position you became director by mistake?” Tripping into billionaire status like “please god I didn't want this!!!”
@smtuffy Sean Tuffy on x
lol, so much for Michael Lewis' “billon dollar business” claim [image]
@innercitypress @innercitypress on x
AUSA Sassoon: You flew to the Super Bowl in a private jet? SBF: I don't recall how I got there. AUSA: Because you flew on private jets so much? SBF: I traveled 100 times. AUSA: GX 1473. [Photo of SBF sleeping on a private jet, it's in https://twitter.com/...
@innercitypress @innercitypress on x
AUSA Sassoon: You knew that there was a risk? SBF: There's always a risk. AUSA: Taking money from FTX to pay back lenders, that's not margin trading, is it? SBF: I'm not sure I agree. AUSA: You understood there was a risk of a hole? SBF: There could become a hole
@innercitypress @innercitypress on x
AUSA Sassoon: You could not deposit $10 then withdraw $1 billion, right? SBF: It depends on the context. AUSA: Did you claim the risk engine custodied collateral? SBF: Yes. AUSA: That's how you marketed FTX? SBF: Sometimes.
@innercitypress @innercitypress on x
Judge Kaplan: Overruled. AUSA Sassoon: You were aware customers could not access their funds? SBF: I was aware. AUSA: You considered calling the Robinhood broker to give you the shares without thinking about it? SBF: I didn't consider that AUSA: Gx 2556
@zerohedge @zerohedge on x
In one corner you have the megabrains from the BOJ In the other corner, you have Caroline Ellison
@zekefaux Zeke Faux on x
SBF said during cross-examination he didn't remember what he said exactly in our November 2022 interview. Here's the key part: [image]
@epsilontheory Ben Hunt on x
Thread. The govt's cross-exam of SBF is a chef's kiss thing of beauty. No notes. Perfection.
@innercitypress @innercitypress on x
SBF: No. AUSA Sassoon: Do you recognize this affidavit that you signed? SBF: No. AUSA: You filed it without reading it? SBF: No, I'm reading it now. AUSA: Let me know if you want me to change the page. SBF: Yes, I've read it.
@innercitypress @innercitypress on x
AUSA Sassoon: You made a pitch to Congress? SBF: I testified. AUSA: You flew to DC on a private plane? SBF: Yep. AUSA: You're familiar with the phrase Crypto Twitter? SBF: Yep. AUSA: This included customers? SBF: Yep.
@innercitypress @innercitypress on x
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
@spreekaway @spreekaway on x
Crypto Twitter, we made it
@innercitypress @innercitypress on x
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.
@smtuffy Sean Tuffy on x
I genuinely think it's hilarious that SBF spent like an hour saying he didn't remember saying things that were memorialized in recordings, newspaper articles, and feckin' congressional testimony. Like what was his end game? 😂
@zekefaux Zeke Faux on x
wild moment from cross-examination today: to refresh SBF's memory, the prosecutor handed him an actual copy of NUMBER GO UP
@innercitypress @innercitypress on x
AUSA: Do you deny Alameda had some accounts with the Allow Negative flag? SBF: No. AUSA: Do you deny that Alameda could withdraw billions with out the risk of being liquidated? SBF: That might be right. AUSA: You don't deny it. SBF: I don't deny it, no.
@spreekaway @spreekaway on x
cross exam so far be like: AUSA: Did you do the crime? SBF: I don't recall AUSA: Is this you saying “I did the crime”? SBF: Sounds like me
@tiffanyfong_ Tiffany Fong on x
Apparently Sam Bankman-Fried spent $15M flying on private jets. Prosecutor: You flew to the Super Bowl on a private jet? SBF: I don't recall how I got there. Prosecutor: Is that because you flew on private jets so frequently??? 🤣 so savage.
@innercitypress @innercitypress on x
AUSA Sassoon: You ordered and trade and Caroline said, Sounds good; you replied LOL. SBF: Yep. AUSA Sassoon: You told her to trade Japanese government bonds? SBF: Yes. AUSA: She sent you spreadsheets about hedging, and that's trading, right? SBF: Yes.
@coloradotravis @coloradotravis on x
Honestly a very educational trial. ‘Margin trading’ is when your brokerage takes your money and pays back loans it used to buy arena sponsorships and mansions and invest in random stuff and slide a few milly over to dad so Barbara will chill the fuck out.
@innercitypress @innercitypress on x
AUSA Sassoon: You told Caroline when to buy certain crypto currencies, correct? SBF: I'm not sure what you are referring to. AUSA: Show the witness GX 1630. You, Ms. Ellison and Sam Trabucco, Jan 25, 2022 - you called Alameda “we,” right? SBF: Yes.
@adamscochran Adam Cochran on x
This. This is art. [image]
@smtuffy Sean Tuffy on x
Narrator: There was no bank
@innercitypress @innercitypress on x
AUSA Sassoon: Do you recall receiving 8 tabs from Caroline? SBF: I'm not sure AUSA: Multiple tabs? SBF: There may have been AUSA: You know the prosecution had Google meta data showing you accessed this 8 alternative spreadsheet? Cohen: Objection! Judge: Overruled
@molly0xfff Molly White on x
He was EXTREMELY evasive when the AUSA tried to ask him if he publicly referred to the FTX platform as “safe”. Ultimately, screenshots of ads, tweets, etc were shown to prove he did this widely.
@molly0xfff Molly White on x
The AUSA then aggressively questioned him about how his public statements that Alameda Research was just like any other customer on FTX diverged from the reality, including that customers were required to keep collateral on FTX.
@molly0xfff Molly White on x
The AUSA made Sam Bankman-Fried read the “fuck regulators” Twitter direct message aloud.
@molly0xfff Molly White on x
He periodically has tried to draw a distinction between statements pertaining to FTX US specifically and FTX international, but the AUSA quickly produced evidence (submitted under oath to Congress, no less) suggesting the statements applied to all entities.
@molly0xfff Molly White on x
Several past statements to journalists, tweets, and a Twitter spaces interview have been brought into evidence to show his public statements. He will often say he doesn't recall saying something, only for an exhibit to be shown where he says that thing.
@molly0xfff Molly White on x
Bankman-Fried came off as pretty evasive in his replies, often claiming “I don't recall” or saying he didn't remember saying something “with that specific phrasing”
@molly0xfff Molly White on x
Asked if he directed trades at Alameda after stepping down as CEO, he said no, but he did direct company to hedge. Govt came prepared with Signal chats of him suggesting specific trades of MAPS/OXY

Chronicles