Sam Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX, has revealed insights into his potential defense strategy as he prepares for his upcoming trial on October 3rd.
The 31-year-old entrepreneur, who is facing fraud charges related to the collapse of FTX, shared a 250-page document detailing his justifications and reflections on the events leading up to the exchange’s downfall. These documents shed light on Bankman-Fried’s state of mind during his eight-month house detention and provide new details about his possible legal defense during the trial.
In the documents, Bankman-Fried criticized his former girlfriend and Alameda’s ex-CEO, Caroline Ellison, for her alleged role in FTX’s collapse. He argued that she was ill-equipped for her position and failed to implement adequate trading strategies that could have protected their businesses from market turmoil. Bankman-Fried also expressed frustration that Ellison avoided discussions on risk management, which eventually led to their breakup.
He also mentioned the discord between Sam Trabucco, co-chief executive of Alameda, and Ellison, acknowledging Trabucco’s aptitude for risk management but claiming that Trabucco quietly left the company by late 2021.
The documents further revealed Bankman-Fried’s intention to challenge the accusations made against him by prosecutors. He accused the law firm Sullivan & Cromwell, overseeing FTX’s bankruptcy, of fabricating the story that he misappropriated user funds. FTX, once considered a trustworthy platform in the crypto world, suffered a collapse in November, resulting in significant losses for customers and damage to the industry.
Bankman-Fried was subsequently arrested and charged with orchestrating a scheme to divert FTX customer funds to a hedge fund he co-founded. Despite pleading not guilty, he faces potential decades in prison if convicted. His bail was revoked in August over claims of witness tampering, and FTX recently sued Bankman-Fried’s parents to recover allegedly siphoned funds from the exchange.