SBF and FTX on Trial - Update for 10-09-2023
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This is the SBF on Trial Podcast and this is the update for 10-09-2023.The trial is shaping up to be one of the most important cryptocurrency cases in history. Bankman-Freed, the former CEO of FTX, is facing seven counts of fraud and conspiracy charges. He's accused of using customer funds to bail out his hedge fund, Alameda Research, and of lying to investors about the financial health of his companies.In the past 72 hours, there have been some major developments in the trial. On Friday, Gary Wang, the co-founder and former CTO of FTX, testified that Alameda owed FTX $11 billion at the time of its collapse in November 2022. This is significantly higher than the $8 billion that Bankman-Freed had previously disclosed.Wang also admitted that FTX did not have a comprehensive risk management framework in place, but he said that this was due to the fast-paced and evolving nature of the cryptocurrency industry.On Thursday, Nishad Singh, the former director of engineering at FTX, testified that Alameda Research received special privileges from FTX, such as an exemption from the exchange's liquidation engine. Singh said that these privileges were granted by Bankman-Freed and Gary Wang.And on Wednesday, Matthew Huang, the co-founder of the venture capital firm Paradigm, testified that Bankman-Freed used FTX customer funds to bail out Alameda Research in May 2022. Huang said that Bankman-Freed told him that he had transferred $2 billion from FTX to Alameda without telling his board of directors or investors.Bankman-Freed's lawyers have argued that he made mistakes while running FTX, but that he did not commit fraud. They say that Bankman-Freed was "overwhelmed" by the company's rapid growth and that he was "trying to do the best he could."The trial is expected to last several weeks, and it's being closely watched by regulators and investors alike. The outcome of the trial could have a significant impact on the future of cryptocurrency regulation.Stay tuned for more updates on the SBF on Trial Podcast