Clarifying his stance on a series of allegations linked to erroneous liquidations, FTX co-founder Sam Bankman-Fried vehemently defended his decisions, saying he had asked former FTX Chief Technology Officer and co-founder Gary Wang to stop liquidations on Alameda Research's accounts.
"I told Gary, we have to stop such liquidations of Alameda's account. They told me they'd done it. Now I know it was the 'Allow Negative,'" he said while testifying on the second day of his trial.
This revelation comes at a pivotal moment in the digital assets industry, with the Benzinga's Future of Digital Assets conference on Nov. 14 approaching. The event will shed light on the future trajectory of the sector and may be informed by such testimonies.
While discussing the beginnings of FTX, Bankman-Fried highlighted the organic growth of the platform, stating, "We asked our friends, we made improvements, word of mouth. It spread organically through social media, we interacted there."
He also mentioned the beneficial regulatory environment in Hong Kong as a primary reason for setting up operations there.
In the testimony, he shed light on the relationship between FTX and Alameda Research.
He expressed concerns about the potentially catastrophic consequences for FTX due to the erroneous liquidation of large accounts such as Alameda Research.
He also touched upon FTX's token, FTT, explaining the "buy and burn" strategy in which FTX used one-third of its weekly profits to purchase FTT and subsequently burn it.
The token was not only traded on FTX but also on other major exchanges, including Binance.
When questioned about market manipulation, Bankman-Fried cited a definition from Jane Street: "Bad trades to change the price of an asset."
This sparked an objection and a clarification from Judge Lewis Kaplan, who instructed the jury to rely on the court's definition of manipulation.
Bankman-Fried also highlighted the demanding nature of his role, sharing, "On a light day, 12 hours. On a hard day, 22 hours."
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