We mostly remember him in the US Congress wearing a suit or holding a cucumber. Sam Bankman-Fried, the founder of FTX, is giving a statement. Understanding who Sam is, and the things that led to billions of dollars in losses, is important for crypto investors to determine what to watch out for in the future.
FTX Founder in Court
Sam Bankman-Fried stated that he founded the crypto hedge fund Alameda Research in 2017. He said that at that time, he had “absolutely no idea” how cryptocurrencies or blockchain technology worked, and he only knew that tokens could be bought and sold on websites called crypto exchanges.
SBF, who spoke about how amazing cryptocurrencies are and testified about the regulation of crypto in Congress, didn’t even know the name of cryptocurrencies 6 years ago. Therefore, those who embrace this field in its early stages need to understand that they are not random people. Those who met cryptocurrencies a few years ago and now try to act knowledgeable and explain the philosophy behind it end up looking ridiculous. We should recognize that those who got involved with crypto 10 years or more ago deserve respect. Otherwise, we will have to fight against the exploitation of those who see this field only as money. Why do impostors and malicious actors in crypto often come into the industry as newcomers?
Experience is the most valuable thing in the crypto field, and it can only be gained over time. For example, those who experienced the WannaCry era, the ETH DAO era, and the MTGOX incident have a significant difference in experience and knowledge compared to others.
If we make price predictions with all kinds of indicators and have a negative attitude towards South Koreans during the LUNA crash, then we must also be cautious about newcomers to the industry like in the case of SBF.
SBF and His Statements in Court
In his testimony today, SBF said that he came up with the idea of starting Alameda because he saw an increasing interest in crypto. He mentioned that he saw two people talking about cryptocurrencies in 2017 and realized that there was demand in this field.
“SBF: Crypto seemed like a place with great demand for an arbitrage provider.
Mark Cohen, one of Sam Bankman-Fried’s lawyers: What did you know about crypto?
SBF: Basically nothing.
Cohen: Where did you borrow money for Alameda? Where did you borrow money for Alameda?
SBF: Genesis, Celsius, BlockFi, Voyager
Cohen: How was your salary?
SBF: I was earning $200,000 per year. Then we hired Caroline Ellison.
Cohen: How did you meet Nishad Singh?
SBF: He was a good friend of my brother. I didn’t know him very well. He was working at Facebook.
Cohen: Did you talk about what happened with Ms. Ellison?
AUSA Sassoon: Objection.
Judge Kaplan: Mr. Bankman-Fried can only respond to what you said.
SBF: I apologized for not mentioning the issues to her.”
He continued his testimony and the lawyer asked about their annual earnings. He said that they made profits ranging from 50% to 100% per year during the early stages of the company.
