Sam Bankman-Fried thinks it’s legal to take FTX deposits through Alameda: Report

Former FTX CEO Sam “SBF” Bankman-Fried addressed the New York court under oath in the absence of the 12-member jury.

According to reports from the court on October 26, SBF's much-anticipated testimony began in a hearing with defense attorney Mark Cohen, the former CEO of FTX, who questioned messaging app Signal and the retention of contact information on the crypto exchange. Bankman-Fried said he acted according to company policies on records, and that none of the media that were set to be “automatically deleted” were “decision sites.”

“Why did you turn off auto-delete?” Cohen asked Bankman-Fried.

“I heard from the supervisors,” he replied.

Cohen accused the former FTX CEO of creating North Dimension, a “shady entity” allegedly used to siphon client funds from Alameda's crypto exchange. According to SBF, former chief regulatory officer Dan Friedberg presented him with the company's founding papers, which he signed without question.

“Did you believe it was legal to take FTX deposits at Alameda?” Cohen asked SBF.

“I did,” he replied.

“I was the CEO of both at the time,” Bankman-Fried said of founding North Dimension under Alameda and FTX. “FTX didn't have a bank account.”

One of the main issues in the Unite Government's case against SBF centers on the former CEO of FTX, who used customer funds from the crypto exchange to invest through Alameda without users' knowledge. Bankuman-Fried testified that he met with Friedberg, law firm Fenwick & West, and FTX's former general counsel, Can Sun, regarding the investments.

“I was just thinking about future trades,” Banman-Fried said of whether he believed FTX's terms of service covered part of the handling of client funds. “And Alameda is empowered to do that.”

RELATED: Sam Bankman-Fried has no way to ‘outfox' prosecutors: Scaramucci

Banman-Fried will be the last witness to take the stand in court for more than three weeks, detailing the alleged money laundering between FTX and Alameda. According to Kaplan, jurors “will decide within the first few days of next week” without hearing the full testimony of the former FTX CEO.

SBF has pleaded not guilty to seven counts in the criminal indictment, but faces five more charges in a second trial scheduled to begin in March 2024.

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