Sam Bankman-Fried, the founder of FTX crypto exchange, admits transferring $650 million worth of Robinhood shares acquired last year to his personal custody.
Crypto entrepreneur Sam Bankman-Fried (SBF) resumed his testimony yesterday in the high-stakes trial surrounding the collapse of FTX. It bears mentioning that October 30 was SBF’s third day on the stand and the fifth week of his trial.
Intense Interrogation From U.S. Prosecutor
Unlike his previous appearances, yesterday’s cross-examination saw intense questioning from the prosecution team, seeking to unravel SBF’s role at Alameda Research and FTX.
U.S. Assistant Attorney Danielle Sassoon led the prosecution team’s cross-examination of SBF. Sassoon questioned SBF about owning $650 million worth of Robinhood’s shares.
Recall that in May 2022, the price of Robinhood shares spiked over 30% after Bankman-Fried purchased $650 million worth of the asset at an average price of $11.52.
SBF Says Buying Robinhood Shares Was His Decision
During the cross-examination, SBF confirmed that he made the decision to buy the Robinhood shares but denied considering calling the online brokerage company to acquire the assets.
The attorney also pressed SBF about the rationale behind transferring the $650 million Robinhood shares to his custody. According to SBF, the rationale behind the transfer was not to lay claims to the shares.
Furthermore, SBF acknowledged being aware that FTX customers could not access their funds when he tried to take custody of the Robinhood shares.
According to journalist David Z. Morris:
FTX Founder Denies Putting Customers at Risk
Attorney Sassoon also probed Bankman-Fried about putting FTX customers at risk as Alameda Research tried to settle its debt. The cryptocurrency entrepreneur confirmed directing Alameda Research CEO Caroline Ellison to pay Alameda Research lenders using FTX assets.
However, he denied knowing that the decision would put users of FTX at risk. Pressing further, Sassoon quizzes SBF whether he knew that taking money from FTX to pay Alameda Research’s debt could create the risk of a hole in the exchange’s balance sheet. In response, the crypto entrepreneur answered in the affirmative.
Recall that SBF previously claimed he believed it was legal to use FTX customers’ funds for Alameda Research’s operations.
The questioning later turned to spreadsheets, highlighting SBF’s knowledge of Alameda Research’s inability to pay lenders.
Bankman-Fried pointed to the Alt 7 document as an alternative spreadsheet he had seen before. Consequently, the U.S. prosecutor asked whether he remembered receiving an eight-tab spreadsheet from Ellison. Responding, SBF acknowledged that he received multiple tabs from the Alameda CEO.
Sassoon to Continue SBF’s Cross-Examination
Yesterday’s proceeding ended with questions regarding SBF’s efforts to replace Alameda with Bahamas-based Modulo Capital, as the crypto entrepreneur answered in the affirmative.
It bears mentioning that SBF invested heavily in Modulo to the tune of over $400 million when Alameda was struggling. Modulo, which was founded in 2022, received a whopping $475 million in seed capital from Alameda.
Meanwhile, Sassoon indicated plans to continue the cross-examination later today, October 31, when the court reconvenes.
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