The disgraced former CEO of the bankrupt crypto exchange FTX is testifying in his own fraud trial against the US government.
Court transcripts recorded by Inner City Press, Sam Bankman-Fried (SBF) tells the day Binance’s Changpeng Zhao (CZ) tweeted that the world’s largest crypto exchange by trading volume was liquidating all of its FTX Token (FTT).
“Cohen (SBF attorney): Let’s go to November 6.
SBF: That’s how it is [a tweet] from CZ.
Cohen: He wrote: we are liquidating the FTT on our books, yes?
SBF: Yes. I discussed it with Caroline [Ellison] whether we should send a tweet in response. Customer withdrawals grew to $1 billion on November 6. I was worried.”
According to SBF, the tweet gave him cause for concern bank run, or that many savers would withdraw their money at the same time because they fear that FTX will go bankrupt. Although SBF claims a tweet in response from CZ was meant to help, it seems the damage has already been done.
“SBF: I was worried about a run on the bank.
Cohen: What is that?
SBF: Suppose you have a bank – …
Cohen: How did you react?
SBF: Caroline tweeted that we would buy FTT for $22
Cohen: November 7, what have you observed regarding withdrawals?
SBF: They have increased. On November 7, $4 billion in net withdrawals, 100 times per average day. We may be in a liquidity crisis.”
Bankman-Fried too repeats that FTX has not invested any client assets.
“Cohen: You tweeted that ‘assets are fine.’ What did you mean?
SBF: My view was that the exchange was fine, no gap in terms of assets.
Cohen: You said here: FTX will continue to process withdrawals…
SBF: FTX has not made any investments with customer assets.”
Last week, SBF decided to testify in court after his colleagues took the witness stand to provide damning evidence against him.
Inner City Press reported that Bankman-Fried’s attorney stated that his client would testify after the three defense witnesses to refute statements made by FTX employees.
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