Former <a href="https://cryptoslate.com/companies/ftx/" rel="noopener noreferrer nofollow">FTX</a> CEO <a href="https://cryptoslate.com/people/sam-bankman-fried/" rel="noopener noreferrer nofollow">Sam Bankman-Fried</a> has concluded the testimony and cross-examination portion of his ongoing criminal case, Bloomberg reported on <a href="https://www.bloomberg.com/news/live-blog/2023-10-30/sam-bankman-fried-returns-to-the-stand-at-fraud-trial" rel="noopener noreferrer nofollow">Oct. 31</a>.
Bankman-Fried acknowledged the existence of an $8 billion hidden debt within <a href="https://cryptoslate.com/companies/alameda-research/" rel="noopener noreferrer nofollow">Alameda Research</a>, which came to light after a bug was fixed in an account known as fiat@. Despite his claims of discovering the massive transfer around September or October 2022, Bankman-Fried said he did not identify any particular employee as responsible and made no personnel changes based on this issue.
<h2 id="8-billion-bug">$8 billion bug</h2>
Bankman-Fried testified on Alameda’s $8 billion hidden debt. That debt was obscured by a bug in an account labeled fiat@ until FTX employee Adam Yedida resolved the bug.
Following his earlier claim that he had learned of the $8 billion transfer by September or October 2022, Bankman-Fried testified that he did not know of any particular employee responsible and said that he didn’t fire anyone in response. He denied making certain decisions, more broadly, said and did not inquire more deeply into the bug.
One exchange went as follows:
<blockquote>
 Bankman-Fried: “I was told that [employees] were busy and that I should stop acting questions because it was distracting.” Sassoon: “Is it your testimony that your supervisees told you to stop asking questions?” Bankman-Fried: “Yeah, and I agreed with them.”
</blockquote>
Sassoon later asked Bankman-Fried whether he hid the risks of Alameda’s use of customer funds from FTX users before November 2022. Bankman-Fried disagreed but admitted that he provided more information to customers after FTX’s bankruptcy.
Finally, Sassoon raised the <a href="https://fingfx.thomsonreuters.com/gfx/legaldocs/klvyzjklmpg/SBF%20deleted%20tweets.pdf" rel="noopener noreferrer nofollow">various assurances</a> that Bankman-Fried tweeted before the company’s collapse. Bankman-Fried admitted that he had tweeted that the company does not invest in client assets — apparently contradicting reality.
<h2 id="redirect-shines-more-light-on-details">Redirect shines more light on details</h2>
After Sassoon’s cross-examination concluded, Bankman-Fried addressed the matter further in redirect. Bankman-Fried said:
<blockquote>
 “The entirety of the liability Alameda had to FTX was about the size of the fiat@ account … That was what myself and most of us had not been aware of in 2022, that roughly $8 billion liability.”
</blockquote>
He concluded that his companies would have had better systems in place to monitor the @fiat account if Alameda and FTX were not involved with each other. He called the company’s oversight of the matter “very poor” in hindsight.
<h2 id="misleading-spreadsheet">Misleading spreadsheet</h2>
Bankman-Fried also commented on a falsified balance spreadsheet. The spreadsheet in question had eight tabs containing alternate versions meant to obscure the degree of exposure to external lending companies such as <a href="https://cryptoslate.com/companies/genesis/" rel="noopener noreferrer nofollow">Genesis</a>.
Bankman-Fried suggested that <a href="https://cryptoslate.com/people/caroline-ellison/" rel="noopener noreferrer nofollow">Caroline Ellison</a> — then the CEO of Alameda Research — had merely sent him the spreadsheet and asked for his opinion. He testified that, at the time, he told her that the spreadsheet looked “reasonable.” Bankman-Fried suggested that multi-tabbed spreadsheets are not unusual but said that he did not remember if he reviewed all those tabs on the spreadsheet in question.
Those statements may or may not shift the blame: Ellison <a href="https://www.bnnbloomberg.ca/ftx-bribes-dating-diary-false-records-ellison-testimony-1.1983685" rel="noopener noreferrer nofollow">testified that</a> Bankman-Fried had told her to create “alternative ways of presenting” the financial situation. She said that she understood this as an instruction to conceal information in the balance sheets.
Bankman-Fried’s testimony has now concluded. Reports from Bloomberg indicate that the court will next hold a charge conference, which will set out instructions for the jury.
The post <a rel="noopener noreferrer nofollow" href="https://cryptoslate.com/sam-bankman-fried-testifies-to-overlooking-8b-software-bug-in-last-day-of-testimony/">Sam Bankman-Fried claims to have overlooked $8B ‘bug’ in last day of testimony</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://cryptoslate.com">CryptoSlate</a>.

Sam Bankman-Fried claims to have overlooked $8B ‘bug’ in last day of testimony

Table of Contents

CryptoSlate

Other articles published on Oct 31, 2023

Celestia releases mainnet beta with 580,000 users receiving airdrop

Unlucky Apex Legends Player Falls Victim to Clever Ash Tactical Ability

Bitget to delist TokenFi over market manipulation concerns

FINTECH.TV Launches Crowdfunding Campaign Using the tZERO Securities Platform

SEC to Reexamine Grayscale’s Bitcoin ETF Request on November 2

What Is Blockchain Network Congestion?

Join our free newsletter for daily crypto updates!