Sam Bankman-Fried, who is testifying at his own trial for securities violations and fraud, says that the mistakes made at his now defunct %Cryptocurrency exchange FTX were due to bad legal advice that he received.
Bankman-Fried is testifying to a judge at his trial to determine which parts of his testimony can be put to jury members.
The 31-year-old former founder of FTX is accused of lying to investors and stealing money from customers. However, Bankman-Fried’s defence is that he was acting on legal advice.
In speaking to the judge, Bankman-Fried defended decisions that have been questioned by prosecutors in the case, including setting some group chats to delete automatically. He said this complied with record keeping policies established by his legal team.
Bankman-Fried said he had discussed many other arrangements with his lawyers, including personal loans he received from his other venture, the Alameda Research hedge fund, and its role as a payments processor for FTX.
Bankman Fried stressed to the judge that he had trusted his legal team to prepare applications for bank accounts for his companies, and that the advice he received from lawyers was accurate and complied with the law.
Prosecutors have objected to Bankman-Fried’s arguments that he acted on legal advice, arguing that it is irrelevant if the attorneys involved were not fully informed of the situation at FTX and Alameda Research.
The FTX cryptocurrency exchange fell into bankruptcy in November 2022, citing $8 billion U.S. in losses and listing thousands of creditors who are owed money.
Bankman-Fried has been charged with multiple counts of securities violations and fraud, and could face more than 20 years in prison if convicted on all charges.
Several former FTX executives have turned states witness and testified against Bankman-Fried in exchange for reduced sentences.
Judge Lewis Kaplan has said that he will rule today (Oct. 27) on what part of Bankman-Fried’s testimony can be put before the jury.