FTX’s Sam Bankman-Fried tells jury that he didn’t commit fraud or take customer funds
Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, walks outside the Manhattan federal court in New York City, U.S. March 30, 2023.
Amanda Perobelli | Reuters
FTX founder Sam Bankman-Fried told jurors in his criminal trial on Friday that he didn’t commit fraud at his crypto exchange, which collapsed late last year.
Bankman-Fried addressed the New York courtroom a day after U.S. District Judge Lewis Kaplan sent jurors home early to consider whether some aspects of the defendant’s planned testimony, related to legal advice he got while running FTX, would be admissible in court.
On Friday morning, defense attorney Mark Cohen asked Bankman-Fried if he defrauded anyone.
“No, I did not,” Bankman-Fried responded.
Cohen followed by asking if he took customer funds, to which Bankman-Fried said “no.”
Bankman-Fried, 31, faces seven criminal counts, including wire fraud, securities fraud and money laundering, that could land him in prison for life if he’s convicted. Bankman-Fried, the son of two Stanford legal scholars, has pleaded not guilty in the case.
Prior to the defendant’s appearance on the stand, the four-week trial was highlighted by the testimony of multiple members of FTX’s top leadership team as well as the people who ran sister hedge fund Alameda Research. They all singled out Bankman-Fried as the mastermind of a scheme to use FTX customer money to fund everything from venture investments and a high-priced condo in the Bahamas to covering Alameda’s crypto losses.
Courtroom sketch showing Sam Bankman Fried questioned by his attorney Mark Cohen. Judge Lewis Kaplan on the bench
Artist: Elizabeth Williams
Prosecutors walked former leaders of Bankman-Fried’s businesses through specific actions taken by their boss that resulted in clients losing billions of dollars last year. Several of the witnesses, including Bankman-Fried’s ex-girlfriend Caroline Ellison, who ran Alameda, have pleaded guilty to multiple charges and are cooperating with the government.
The judge’s decision to send the jury home on Thursday allowed Bankman-Fried and his defense team to audition their best legal material for Judge Kaplan.
‘Significant oversights’
On Friday, Bankman-Fried acknowledged that one of his biggest mistakes was not having a risk management team or chief regulatory officer. That led to “significant oversights,” he said.
Cohen walked Bankman-Fried through his background and how he got into crypto. The defendant said he studied physics at the Massachusetts Institute of Technology and graduated in 2014. He then worked as a trader on the international desk at Jane Street for over three years, managing tens of billions of dollars a day in trading. That’s where he learned the fundamentals of things like arbitrage trading.
In the fall of 2017, Bankman-Fried founded Alameda Research.
“This was when crypto was starting to become publicly visible for the first time,” Bankman-Fried testified.
He said people were excited about it, watching bitcoin, which had jumped from $1,000 to $10,000 in a two-month period. Banks and brokers weren’t involved yet and it seemed like there would probably be big demand for an arbitrage provider, he said.
“I had absolutely no idea” how cryptocurrencies worked, Bankman-Fried said. “I just knew they were things you could trade.”
The first Alameda office was in an Airbnb in Berkeley, California, he said. It was listed as a two bedroom but they used the couch in the living room as a third bed and the attic as a fourth.
He started FTX in 2019. Trading volume grew substantially on FTX from a few million dollars a day to tens of millions of dollars that year to hundreds of millions of dollars in 2020. By 2022, that number was up to $10 billion to $15 billion of dollars per day in trading volume, he said.
Bankman-Fried said Alameda was permitted to borrow from FTX, but his understanding was that the money was coming from margin trades, collateral from other margin trades or assets earning interest on the platform.
At FTX, there were no general restrictions on what could be done with funds that were borrowed as long as the company believed assets were greater than liabilities, Bankman-Fried testified.
In 2020, a routine liquidation gone wrong led to some of the special borrowing permissions at Alameda, he said. The risk engine was sagging under the weight of growth. A liquidation that should have been in the thousands of dollars was in the trillions of dollars. Alameda was suddenly underwater because of closing the position.
The incident exposed a larger concern, that the potential of an erroneous liquidation of Alameda could be disastrous for users.
Bankman-Fried said he talked to FTX’s engineering director Nishad Singh and co-founder Gary Wang, both of whom testified earlier on behalf of the prosecution. They suggested creating an alert, which would prompt the user to deposit more collateral, or a delay, Bankman-Fried said. They later implemented a feature like that, he said, adding that he learned it was the “allow negative” feature.
Bankman-Fried testified that he wasn’t aware of the amount Alameda was borrowing or its theoretical max. As long as the net asset value was positive on the exchange and the scale of borrowing was reasonable, increasing the line of credit so Alameda could keep filling orders was fine, he said. Bankman-Fried added that he now believes what Singh and Wang did was increase the line of credit.
Tough sell
Convincing the jury will be a tall order for Bankman-Fried after a mountain of damning evidence was presented by the government.
Prosecutors also entered corroborating materials, including encrypted Signal messages and other internal documents that appear to show Bankman-Fried orchestrating the spending of FTX customer money.
The defense’s case, which consists of Bankman-Fried’s testimony along with that of two witnesses who took the stand Thursday morning, hinges largely on whether the jury believes the defendant didn’t intend to commit fraud.
On Thursday, under questioning led by Cohen, Bankman-Fried appeared to place much of the criminal blame on FTX’s chief regulatory officer, Dan Friedberg, as well as outside counsel Fenwick & West, which advised the crypto exchange. Bankman-Fried spoke about Friedberg’s active involvement in everything from the companywide auto-deletion policy on messaging apps like Signal, to the creation of Alameda’s North Dimension bank account, where billions of dollars worth of FTX customer money was funneled.
The former FTX chief also said that the hundreds of millions of dollars in personal loans to himself and other founders of the platform were structured through promissory notes drafted by his in-house legal team and discussed in concert with his general counsel and Friedberg. Having the blessing of his legal counsel was something that SBF said he “took comfort in.”
— CNBC’s Dawn Giel contributed to this report
Renewables increased their output by almost 10% and provided nearly a quarter of US electrical generation in 2024, according to newly released US Energy Information Administration (EIA) data.
Solar was still No 1
Solar remained the US’s fastest-growing source of electricity in 2024. Utility-scale and “estimated” small-scale (e.g., rooftop) solar combined increased by 26.9% in 2024 compared to the same period in 2023, according to the SUN DAY Campaign, which reviewed EIA’s “Electric Power Monthly” report data.
Utility-scale solar thermal and photovoltaic expanded by 32%, while small-scale solar increased by 15.3%. Together, solar was nearly 7% (6.91%) of total US electrical generation for the year.
In December alone, electrical generation by utility-scale solar expanded by 42% compared to December 2023.
Small-scale solar (systems <1 MW) accounted for 27.9% of all solar generation and provided 1.9% of the US electricity supply in 2024. In fact, small-scale solar PV generates over five times more electricity than utility-scale geothermal.
2024 renewables milestones
The electrical output of US wind farms in 2024 grew by 7.7% year-over-year. Wind remains the largest source of electrical generation among renewable energy sources, accounting for 10.3% of the US total.
Wind and solar combined provided more than 17.2% of US electrical generation during 2024. The mix of all renewables – wind, solar, hydropower, biomass, geothermal – provided 24.2% of total US electricity production in 2024 compared to 23.2% of electrical output a year earlier.
Between January and December, electrical generation by renewables grew by 9.6% compared to the same period the year before – nearly three times the growth rate of natural gas (3.3%) and over 10 times that of nuclear power (0.9%).
In December alone, electrical generation by renewables grew by 10.1% compared to December 2023.
Wind and solar together produced 15.9% more electricity than coal and came close to matching nuclear power’s share of total generation (17.2% vs. 17.8%).
The mix of renewables reinforced their position as the second largest source of electrical generation, behind only natural gas.
“Renewable energy sources now provide a quarter of the nation’s electricity,” said the SUN DAY Campaign’s executive director, Ken Bossong. “Consequently, the rash efforts of the Trump Administration to undermine wind, solar, and other renewables will have serious negative consequences for the nation’s electricity supply and the economy.”
Read more: Renewables provided 90% of new US capacity in 2024 – FERC
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Tesla has applied for a permit to operate a ride-hailing service in California, but it will be using human drivers rather than the promised robotaxi.
Last year, Tesla CEO Elon Musk claimed that Tesla would launch “unsupervised self-driving in Texas and California in Q2 2025.”
However, we suspected that this would not be “unsupervised self-driving’ in customer vehicles like Tesla has been promising since 2016, but an internal fleet with teleoperation support in a geo-fenced area for ride-hailing services, much like Waymo has been doing for years.
Sure enough, Musk confirmed last month that this was the plan for Austin in June. We describe this as a “moving of the goal post” for Tesla.
With the focus on Austin in June, Tesla stopped talking about California, which was announced to happen at the same time as Texas last year.
Now, Bloomberg reports that Tesla has applied for a ride-hailing permit in California:
The electric vehicle manufacturer applied late last year for what’s known as a transportation charter-party carrier permit from the California Public Utilities Commission, according to documents viewed by Bloomberg. That classification means Tesla would own and control the fleet of vehicles.
But this application is for a regular ride-hailing service, like Uber, albeit for an internal fleet rather than vehicles operated by customers.
Tesla has yet to apply for a permit to operate driverless vehicles:
In its communications with California officials, Tesla discussed driver’s license information and drug-testing coordination, suggesting the company intends to use human drivers, at least initially. Tesla is applying for the same type of permit used by Waymo, Alphabet Inc.’s robotaxi business. While Tesla has approval to test autonomous vehicles with a safety driver in California, it doesn’t have, nor has applied for, a driverless testing or deployment permit from the state’s Department of Motor Vehicles, according to a spokesperson.
Musk claimed that he believes Tesla will be able to achieve “unsupervised self-driving” in California by “the end of the year”, but he has claimed that every year for the past decade.
The latest available data shows that Tesla’s Full Self-Driving system is achieving about 500 miles between critical disengagement. Tesla has stated that it believes it needs to reach 700,000 miles between critical disengagement to be safer than humans.
Electrek’s Take
This is just a step for Tesla to test ride-hailing services ahead of autonomy. A nothing burger, really, since ride-hailing has obviously been solved already by several companies, Lyft, Uber, Didi, etc.
What needs to be solved is autonomous driving.
As I have been saying for the last year, I am sure Tesla will be able to launch an internal fleet with teleoperation support in a geo-fenced area for a ride-hailing service in California later this year like it plans to do in Austin in June, but that’s nowhere near what Tesla promised since 2016.
It’s a moving of the goal post, and it’s basically just proving that Tesla is able to do something similar to Waymo – 5 years later.
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Tesla drivers in China are using the new Full Self-Driving update and are racking up fines as the system drives in bike lanes and makes illegal turns.
As we reported earlier this week, Tesla has started to release advanced driver-assist features sold under its Full Self-Driving (FSD) package in China.
The feature is called “Autopilot automatic assisted driving on urban roads” as Tesla seems more cautious about using the term “Full Self-Driving” in China, but it is a feature known for being in the FSD package everywhere else.
Tesla has been facing a lot of issues in releasing FSD features in China. The automaker has been limited in its neural net training due to restrictions about data coming in and out of the country, and it found it difficult to adapt to regulations regarding bus lanes and other China-specific road rules.
CEO Elon Musk warned that FSD in China would be a problem during Tesla’s earnings call last month due to the different rules. He mentioned bus lanes as an example:
By the way, were about the biggest challenges in making FSD work in China is the bus lanes are very complicated. And there’s like literally like hours of the day that you’re allowed to be there and not be there. And then if you accidentally go in that bus lane at the wrong time, you get an automatic ticket instantly. So, it’s kind of a big deal, bus lanes in China.
The automated ticketing system is not just for bus lanes and Tesla owners are learning about it the hard way.
Tesla owners have been testing out the features in live streams on social media and some of them are reporting getting numerous tickets for using FSD.
For example, this Tesla driver received 7 tickets in the space of a single drive because the FSD drove in bike lanes and made illegal maneuvers:
Car News China tracked several live streams and customer feedback on Chinese social media, and the consensus appears to be that it’s “pretty good, but with lots of bugs”.
The drivers are particularly impressed with how “natural” FSD drives, but they also noted that it still
Where the system lacks is the understanding of local traffic rules (such as no use of shoulder/bike lanes on turns, similar to the bus lane rules that Elon talked about in the most recent earnings call) and the sporadic use of wrong lanes (e.g. going straight in a left or right turn only lane) or navigation showing the vehicle in one lane when in fact it’s in another or wrong perception of objects (red balloons as traffic lights). Many of the live streams counted the number of traffic violations from the vehicle and the number of points that would have been taken off or licenses suspended (12 points = suspension) as a result.
Chinese media websites are now getting flooded with Tesla vehicles running red traffic lights, failing to recognize green lights, and driving on restricted lanes, like the video above.
The report also highlights how Tesla is facing strong competition in ADAS in China, with competitors like Nio, Xpeng, BYD, and others launching competitive products, which is not necessarily the case in other markets for Tesla.
Electrek’s Take
I feel like this is likely going to result in bad PR for Tesla in China. You can’t have drivers losing their licenses because FSD doesn’t recognize bike lanes.
Now, of course, Tesla will say that the driver remains responsible, but I don’t know how good Tesla’s messaging is on that front in China.
It’s going to be an interesting story to track in the coming months.
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