Disgraced FTX founder Sam Bankman-Fried (SBF) provided an explanation for his decision to delete corporate messages during a closed-door testimony on October 26. However, this explanation was given without the presence of the trial’s jury. The prosecutor, Danielle Sassoon of the Southern District of New York, questioned SBF about why he started using the encrypted messaging app Signal for corporate communications. SBF responded that he had only used Signal with the approval of FTX counsel Daniel Friedberg. However, SBF admitted that he had never sought prior approval before utilizing Signal’s auto-delete feature.
SBF revealed that he had changed his toggle on Signal to enable the auto-delete feature sometime in 2021. When prompted by Sassoon about seeking approval for this change, SBF admitted that he had not sought approval. He further explained that a document retention policy, allegedly approved by Friedberg, only applied to emails and not other forms of communication.
Sassoon questioned SBF about whether any lawyer had informed him that he could delete his messages with Caroline Ellison, Gary Wang, and Nishad Singh. SBF replied that no lawyer had specifically told him that he could delete those messages. SBF apologized for not having the document retention policy and stated that his memory was not clear on the matter.
Regarding the communications about the seven “fake” balance sheets prepared by Caroline Ellison, SBF argued that deleting the messages was permissible because verbal discussions were not required to be reported. When Sassoon raised the issue of an alleged $13 billion hole in the exchange’s balance sheet, SBF claimed that the messages were never shared with lawyers in accordance with the company’s data retention policy. He stated that he was concerned about statements being taken out of context and causing embarrassment.
It is important to note that SBF’s testimony occurred without the presence of the jury, meaning that the jury did not have the opportunity to hear his explanation. The trial against SBF is ongoing, and these statements will likely be subject to further scrutiny in the courtroom.
In conclusion, SBF provided some rationale for deleting corporate messages during his closed-door testimony, stating that he had used Signal with the approval of FTX counsel but had not sought prior approval for the app’s auto-delete feature. He also explained his understanding of the document retention policy and why he believed certain messages could be deleted. However, it remains to be seen how his explanations will be received by the jury and how they will impact the ongoing trial.