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Sam Bankman-Fried Believed The Hedge Fund Could Cover $8 Billion Debt To Ftx

31 October, 2023


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The founder of the famed cryptocurrency platform FTX founder has delivered his testimony. Sam Bankman-Fried, the former billionaire, delivered his official testimony on Monday. 

There, he claimed that the Alameda Research hedge fund was sufficiently stacked in terms of assets to cover debts. He believes that the assets could cover a debt worth $8 billion to the cryptocurrency exchange. He maintained his claim until recently, when both the hedge fund and FTX collapsed.

The former billionaire has delivered testimony in his own defense at the fraud trial against him. The 31-year-old has said that he was only concerned, surprised even. However, he claimed that he was not alarmed.

He said that it was only in October of 2022 that he learned of Alameda having borrowed $8 billion from FTX deposits. The $8 billion came from customers at FTX who had kept the amount for exchange. Bankman-Fried claimed that “If it were far larger, I would have been calling a crisis.”

He delivered his statement from the witness stand in a federal court in Manhattan. His statement came as a response to the defense lawyer, Mark Cohen’s questions.

The Massachusetts Institute of Technology grad, Bankman Fried, has apparently looted billions from the funds at FTX. The prosecutors are of this opinion that the former billionaire has used customer funds to prop up Alameda. Alameda hedge funds, on the other hand, have contributed to political campaigns in the U.S., prosecutors claim.

If Bankman-Fried is convicted after the trial, he could end up with a long prison sentence. 

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Debkanya is a lawyer turned writer. With an experience of 3 years, she is your go-to source for all things law. She has a soft corner for the US and international section. When the weekend arrives, you'll find her reading up on politics, Austen, or travel blogs over a cup of coffee.

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