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As Sam Bankman-Fried, the founder of FTX, prepares to take the stand for his trial, facing charges related to allegedly mishandling billions in customer funds, his online posts assuring users of the cryptocurrency exchange’s safety are likely to come under scrutiny. Here are some of the posts that may be a focal point during the trial:
- “FTX is fine. Assets are fine” In a now-deleted thread posted on Nov. 7, Bankman-Fried reassured the public that the exchange was “fine” and stated that “FTX has enough to cover all client holdings.” However, jurors at the trial were presented with screenshots of this thread, and FTX’s former chief technology officer, Gary Wang, testified that the exchange did not have the assets to cover withdrawal requests.
- “Backstopping customer assets should always be primary. Everything else is secondary.” Prosecutors allege that Bankman-Fried misled FTX customers about the security of their assets before the exchange filed for bankruptcy in November 2022. Caroline Ellison, Alameda’s former chief executive, testified that Bankman-Fried’s post regarding “backstopping” customer assets on June 27, 2022, was misleading, as Alameda had borrowed billions of dollars of FTX customer assets to repay lenders the previous month. Wang also testified that the publicly listed “backstop fund” for customers was a misleading figure.
- “We don’t invest client assets, even in treasuries.” Another deleted post from Bankman-Fried on Nov. 7 asserted that FTX did not invest customer funds and highlighted the exchange’s history of safeguarding client assets. However, Ellison testified that by the summer of 2022, Alameda, a related company, was using FTX customer funds for venture investments. She expressed her concerns about customers withdrawing their funds as she was aware that Alameda had depleted the funds.
These tweets may play a crucial role in the trial, where Bankman-Fried faces allegations of providing misleading information to FTX customers regarding the security and handling of their assets, ultimately leading to the exchange’s bankruptcy in 2022.
