SBF on the stand: Sam Bankman-Fried thought taking FTX deposits through Alameda was legal

• SBF is cross-examined on legal advice, FTX terms of service, and auto-deletion without the jury present.
• Bankman-Fried says he believed it was permissible for Alameda to borrow from assets held as collateral for margin positions.
• It’s a mock court as Judge Kaplan wanted to hear testimony that might be repeatedly objected to before the jury.

Sam Bankman-Fried (SBF) took the stand on Thursday, October 26, though in a trial court with the jury not present as Judge Kaplan thought it should not hear certain areas of testimony. It is a fulfillment of a previous report, after the prosecution team, led byAssistant United States Attorney (AUSA) Nicolas Roos, handed the stage to the defense to make its argument.

Also Read: Caroline Ellison points finger at Sam Bankman-Fried, details from day 5 of SBF trial

SBF on the stand: his testimony in the absence of the jury.

Sam Bankman-Fried had his day in court on Thursday, this time as a witness in his own trial. The defendants had put on two more witnesses in its defense, the lawyer from the Bahamas, Ms. Rolle, and the "expert" Joe Pimbley, with neither being able to prove much. This meant it all boiled down to SBF.

While SBF had the window of opportunity to back out, he did not.. Judge Kaplan sent the juror home for the day so he could hold a hearing before SBF started testifying. The defense called the defendant to the stand, with AUSA Sassoon first asking SBF what communications platforms FTX used. Telegraph, Slack, and Signal were his responses.

SBF also indicated that FTX had been headquartered in Hong Kong and faced some security concerns while over there, such that former employees might have data to sell to a competitor. Nevertheless, the platform never suffered a core breach although third parties had experienced being hacked.

General Counsel of FTX US, Ryne Miller, was also mentioned, as well as the CEO of FTX US, Brett Harrison. This was concerning the auto-delete function on Signal, with SBF saying it was to manage informal chatter in the discussion.

SBF had overseen the establishment of North Dimension, a company set up by Alameda Research in 2020. He had signed for both FTX and the hedge fund, acting in CEO capacity and insured by the fact that FTX did not have a bank account. In this regard, he thought it was legal to take FTX deposits through Alameda.

Cohen presented the North Dimension bank account application to Silvergate Bank; SBF confessed to Dan Friedberg that he signed it, using funds from Alameda Research, which borrowed from FTX. In his words,

“I told them of an investment I wanted to make. Sometimes instead of Alameda being the investor, I would be. I was thinking about it from a business perspective.”

He thought taking FTX deposits was legal after having skimmed the terms of service and thought they only applied to futures trading, which Alameda was authorized to do.

Omnibus wallet, where all customers’ net BTC were kept

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