Benzinga - FTX founder Sam Bankman-Fried on Friday denied defrauding investors of their funds and claimed he had genuinely thought he could build the best product on the market.
Taking the stand on the second day of his ongoing trial, he was called to the stand by his lawyer Mark Cohen, and was asked about his involvement in the establishment and operations of Alameda Research and FTX.
Bankman-Fried detailed the inception of FTX, sharing that the name stands for "Futures Exchange," a venture that he believed would offer a superior service for users. "We thought we could build the best product on the market," Bankman-Fried testified, Inner City Press reported.
His transition into the crypto world came after observing the rising public interest in cryptocurrencies, particularly in 2017.
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Delving into Bankman-Fried's professional journey, Cohen inquired about his time at Jane Street, where he worked in international ETFs.
Departing from Jane Street, Bankman-Fried founded Alameda with colleagues like Caroline Ellison and Adam Yedidia.
They initially set up an Airbnb in North Berkeley, California, naming their venture 'Alameda' after the county.
The choice of name was also influenced by their desire to maintain a low profile, avoiding names like "Sam's Crypto Trading Firm."
During his testimony, Bankman-Fried also touched upon the financial aspects of Alameda, mentioning their borrowings from entities like Genesis, Celsius, BlockFi, and Voyager.
He highlighted the company's remarkable performance, boasting an impressive 50 to 100% annualized profit.
Speaking about the establishment of FTX, Bankman-Fried recalled the company's move to Hong Kong, which was influenced by a conference he attended and subsequent meetings that proved fruitful, according to Inner City Press.
Also Read: The True Cost Of The FTX Collapse: How Much Did Sam Bankman-Fried Really Make?
It was in Hong Kong that FTX took shape, starting from a rented WeWork space.
The discussion then steered towards the intricacies of FTX's operations, including the concept of clawbacks. Bankman-Fried detailed that if the value of an asset went negative, FTX would approach the user, but couldn't always rely on this with every user.
If FTX couldn't manage the deficit, the losses would be distributed among other users.
The testimony also revealed Bankman-Fried's efforts to educate users, with Cohen highlighting "Explainers" that were published on FTX's ZenDesk to help users understand various aspects of trading.
Read Next: Bankman-Fried's Day In Court: A Scandal To Rival History's Most Infamous Financial Meltdowns?
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