FTX Founder Sam Bankman-Fried Admits to Deleting Corporate Messages without Prior Approval
Summary:
Sam "SBF" Bankman-Fried, the controversial founder of FTX, attempted to justify his decision to erase corporate messages during a private testimony on October 26. He claimed he used the encrypted messaging platform Signal with the approval of his legal advisor, but confessed he didn't seek permission to enable the auto-delete feature. SBF also mentioned a document retention policy, supposedly approved in 2021, which applied only to emails. He didn’t receive specific permission to delete messages exchanged with colleagues. When questioned about deleting messages regarding several false balance sheets and a significant deficit in the exchange's books, SBF admitted these were not shared with lawyers and expressed concerns about potential misinterpretation.
On October 26, Sam "SBF" Bankman-Fried, the infamous founder of FTX, attempted to justify his decision to erase corporate messages during a private testimony without the presence of the trial jury. Southern District of New York prosecutor Danielle Sassoon asked him why he transitioned to using the encrypted messaging platform Signal for corporate exchanges. SBF asserted he only did so after getting approval from FTX legal advisor Daniel Friedberg. But, he later admitted although Signal's use was approved, he did not seek prior consent to enable the auto-delete feature of the app. "I recall setting my toggle to auto-delete after one week," the ex-crypto boss admitted, adding this system has been in operation since 2021. Solicitor Sassoon questioned, "Did you obtain approval?" to which SBF responded, "No."
Seeking to understand SBF's reasoning, he stated he did it due to a document retention policy that was put in effect in 2021 and supposedly approved by Friedberg. This policy, according to SBF, only applied to emails and not to other means of communication. Sassoon further inquired, "Did any attorney give permission to erase your messages with Caroline Ellison, Gary Wang, and Nishad Singh?” SBF responded, "Not precisely.”
He expressed regret, stating, "I'm sorry, I wish I had that [document retention] policy now. My recollection…" Concerning discussions on the seven fabricated balance sheets created by associate Caroline Ellison, SBF said it was okay to erase the message as there was no obligation to record "verbal discussions." Later, regarding an alleged $13 billion gap in the exchange's ledger, SBF claimed these messages were never disclosed to lawyers as per the company's data retention rules. "My concern was that statements might be taken out of context, causing possible embarrassment," he confessed.
Published At
10/26/2023 8:08:00 PM
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