<p>The post <a rel="noopener noreferrer nofollow" href="https://coinpedia.org/news/sam-bankman-fried-breaks-his-silence-in-a-tense-courtroom-drama-heres-what-happened/">Sam Bankman-Fried Breaks His Silence in a Tense Courtroom Drama: Here’s What Happened</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://coinpedia.org">Coinpedia Fintech News</a></p>
<p>In what could be termed as the most awaited courtroom drama of 2023, Sam Bankman-Fried, the former founder of now-defunct cryptocurrency exchange FTX and quantitative trading firm Alameda Research, finally broke his silence. SBF is accused of charges, including money laundering and fraud, that led to the abrupt collapse of his crypto empires.</p>
<p>SBF explained that FTX was primarily a margin exchange, likening it to a mortgage system. However, one startling admission was the absence of a dedicated risk management team. Yes, you read that right—<a href="https://twitter.com/BitMEXResearch/status/1718046682930184577" rel="noopener noreferrer nofollow">no Chief Risk Officer</a>, no team in place to handle the inherent risks of running a margin-based operation with billions on the line.</p>
<blockquote class="wp-block-quote">
 <p><em>“By far the biggest mistake was we did not have a dedicated risk management team; we didn’t have a chief risk officer,” SBF admitted.</em></p>
</blockquote>
<h2 class="wp-block-heading" id="strong-the-great-divide-of-alameda-research-strong"><strong>The Great Divide of Alameda Research</strong></h2>
<p>The trial also took a retrospective journey back to 2018, shedding light on the <a href="https://twitter.com/BitMEXResearch/status/1718042448268521641" rel="noopener noreferrer nofollow">split within Alameda Research</a>. SBF revealed that despite the schism that resulted in a significant exodus of capital and talent from the firm, Alameda achieved 50% to 100% annualized returns post-split. While he publicly apologized to Ms. Ellison, a key figure in the company during the schism, he refrained from diving into the details of the divide.</p>
<p>The hearing took a critical turn when discussing <a href="https://twitter.com/BitMEXResearch/status/1718046317438517270" rel="noopener noreferrer nofollow">Alameda’s ability to borrow money from FTX</a>. SBF clarified that the funds borrowed were primarily from margin traders, sparking concerns about potential conflict of interest and lack of transparency. SBF also admitted to borrowing personally from Alameda but denied that it influenced his political donations.</p>
<p>SBF also denied directing employees like Ryan Salame and Nishad Singh to make political donations. But the source of funds for his political contributions? <a href="https://twitter.com/BitMEXResearch/status/1718054048585093395" rel="noopener noreferrer nofollow">Loans from Alameda</a>.</p>
<h3 class="wp-block-heading" id="strong-the-billion-dollar-fiction-strong"><strong>The Billion-Dollar Fiction?</strong></h3>
<p>One of the most eyebrow-raising moments was SBF’s casual explanation for why he wanted FTX’s 2021 revenue to cross the<a href="https://twitter.com/BitMEXResearch/status/1718055202593317058" rel="noopener noreferrer nofollow"> $1 billion mark—because “it’s just a round number.”</a> This raises questions about corporate governance and whether achieving aesthetic milestones precedes genuine financial stability.</p>
<h3 class="wp-block-heading" id="h-insurance-fund-a-pledge-not-a-pool"><strong>Insurance Fund: A Pledge, Not a Pool</strong></h3>
<p>Contrary to standard industry practices, SBF revealed that FTX’s advertised insurance fund was not a separate pool of money. Instead, it was a “pledge” from the company to cover any customer account losses, raising questions about FTX’s overall solvency and risk management.</p>
<p>The defense still has much to clarify. SBF’s revelation of talks to raise equity capital from Genesis, another lender, indicates that the saga is far from over.&nbsp;</p>

Sam Bankman-Fried Breaks His Silence in a Tense Courtroom Drama: Here’s What Happened

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