Disgraced FTX founder Sam Bankman-Fried (SBF) tried to explain his rationale for deleting corporate messages during a closed-door testimony without the presence of the trial’s jury on Oct. 26.
When prompted as to why he started using corporate communications on the encrypted messaging app Signal by prosecutor Danielle Sassoon of the Southern District of New York, SBF claimed that he only did so with the approval of FTX counsel Daniel Friedberg. However, SBF later said that while counsel approved the use of Signal, he never sought prior approval before utilizing the app’s auto-delete feature.
“At some point I remember changing my toggle to one week auto delete,” the former crypto executive said, adding that the practice has been in place since 2021. “Did you seek approval?” Asked Sassoon. “No,” replied SBF.
When asked to explain his rationale, SBF claimed that a document retention policy, in place since 2021 and allegedly approved by Friedberg, only applied to emails and not other forms of communication. “Did any lawyer tell you you could delete your messages with Caroline Ellison, Gary Wang and Nishad Singh?” Sassoon asked. “Not specifically,” replied SBF.
“I apologize, I wish I had that [document retention] policy now. My memory…”
Regarding communications on the seven “fake” balance sheets prepared by colleague Caroline Ellison, SBF said deleting the message was permissible because “Yes. For example, verbal discussions were not required to be reported.” In a later question about 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. “I was concerned that statements could be taken out of context, that it could be embarrassing,” he said.