Figures pictured on a cardboard effigy of Grenfell Tower filmed being burned were not meant to represent people who died, a court heard.
Paul Bussetti, 47, told Westminster Magistrates’ Court the images depicted friends who were at a bonfire party on 3 November 2018.
He shared footage of the effigy on WhatsApp and it was added to YouTube.
Mr Bussetti denies sending “grossly offensive” material via a public communications network.
The clip of the cardboard building, which had “Grenfell Tower” written on it, was recorded at a party attended by about 30 people in south London.
Prosecutors said the footage is racist in its content, while a relative of one of the 72 people who died in the blaze on 14 June 2017 called it “revolting”.
Mr Bussetti, of South Norwood, told the court the effigy had been created by his friend Steve Bull and was meant as a joke “about us”.
Asked who the characters on the effigy were, he said they were “the majority of people that were at the party” who had all found it “funny”.
One black-clad figure who was referred to as “ninja” was meant to represent his friend’s son who did martial arts, while his own image had been on the other side of the box, the Mr Bussetti said.
The father-of-two said he shared the footage with about 20 people on two WhatsApp groups but he had never intended it to go further.
When prosecutor Philip Scott suggested he sent the footage because it was in keeping with other “highly racist” content he shared, Mr Bussetti replied that it was “just banter” and denied being racist.
He also told the court he had not originally told police that the people in the tower were him and his friends because he was “scared” and “nervous”.
The trial continues.