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FTX founder Sam Bankman-Fried arrives on the U.S. federal courthouse in New York Metropolis to submit his not responsible plea on March 30, 2023. Bankman-Fried confronted this week robust questioning from prosecutors who sought to color him because the mastermind behind a large fraud at FTX.
Ed Jones/AFP by way of Getty Photographs
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Ed Jones/AFP by way of Getty Photographs
FTX founder Sam Bankman-Fried arrives on the U.S. federal courthouse in New York Metropolis to submit his not responsible plea on March 30, 2023. Bankman-Fried confronted this week robust questioning from prosecutors who sought to color him because the mastermind behind a large fraud at FTX.
Ed Jones/AFP by way of Getty Photographs
With the trial turning towards him, Sam Bankman-Fried took what could possibly be the largest gamble of his life: The disgraced founding father of the cryptocurrency change FTX testified in his personal protection.
It didn’t go nicely.
Taking the stand was all the time going to be a dangerous transfer — one few prison defendants make. And fewer than a minute into an unyielding cross-examination by the prosecution, it was clear why.
Time and time once more, the U.S. authorities’s attorneys pointed to contradictions between what Bankman-Fried mentioned in public and what he mentioned — and did — in non-public, as they continued to construct a case that he orchestrated one of many largest monetary frauds in historical past.
For Bankman-Fried, the stakes are excessive. He is been charged with seven prison counts, together with securities fraud, and if he’s discovered responsible, he might spend the remainder of his life in jail.
Listed here are 4 takeaways from Bankman-Fried’s testimony, which spanned three days, from Friday to Tuesday.
It was brutal at occasions
Veteran prosecutor Danielle Sassoon, a former clerk with the late Justice Antonin Scalia, is thought to be an efficient litigator, and in her cross-examination of the defendant, she delivered.
For nearly eight hours, the assistant U.S. Lawyer for the Southern District of New York requested Bankman-Fried a litany of incisive questions. She moved rapidly, and at any time when the defendant hesitated, she dug in.
Bankman-Fried appeared to have a troublesome time remembering key conversations and conferences. “I do not recall,” he mentioned repeatedly.
The co-founder of FTX and the crypto buying and selling agency Alameda Analysis went from giving curt “yep” and “no” solutions — to rambling. On a number of events, Choose Lewis Kaplan admonished the defendant for not paying consideration.
“Please reply the query,” Kaplan informed Bankman-Fried repeatedly.
And with every passing hour, Bankman-Fried appeared to get increasingly more irritated. He typically disagreed with how Sassoon characterised his previous feedback — in trial testimony, but additionally in media experiences.
At occasions, he appeared resigned. Bankman-Fried slumped in entrance of the microphone, and when the prosecutor requested him to learn his prior statements aloud, he did so with unmistakable reluctance.
New York Occasions journalist Andrew Ross Sorkin talks to Bankman-Fried on stage on the 2022 New York Occasions DealBook occasion in New York Metropolis on Nov. 30, 2022. Bankman-Fried talked regularly with the media and in different venues. These phrases at the moment are coming again to chew him.
Thos Robinson/Getty Photographs for The New York Occasions
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Thos Robinson/Getty Photographs for The New York Occasions
New York Occasions journalist Andrew Ross Sorkin talks to Bankman-Fried on stage on the 2022 New York Occasions DealBook occasion in New York Metropolis on Nov. 30, 2022. Bankman-Fried talked regularly with the media and in different venues. These phrases at the moment are coming again to chew him.
Thos Robinson/Getty Photographs for The New York Occasions
Confronting his personal phrases
Bankman-Fried was the general public face of FTX. He appeared on journal covers and at large enterprise conferences, and he regularly frolicked with celebrities together with Tom Brady.
He additionally did not retreat from the highlight after FTX and Alameda Analysis imploded.
Bankman-Fried did media interviews even after his firms collapsed and he was indicted. He opined on X, previously referred to as Twitter. He even tried to begin his personal e-mail publication.
That tendency to speak got here again to chew him. Massive time.
Sassoon’s aim was to demolish Bankman-Fried’s claims that he was somebody who merely struggled to maintain up with the velocity and magnitude of FTX’s progress, and failed to acknowledge the extent of its troubles — together with the misuse of FTX buyer cash.
The seasoned prosecutor sought to color Bankman-Fried as one thing else completely, as somebody who directed his subordinates to funnel billions of {dollars} from FTX’s customers to Alameda Analysis, to plug holes within the firm’s steadiness sheet, and to fund lavish bills.
Bankman-Fried purchased luxurious actual property, and FTX used non-public planes to ferry Amazon packages from the USA to The Bahamas, the place FTX was based mostly.
And Sassoon sought repeatedly to level out contradictions between Bankman-Fried’s public statements and his non-public feedback and actions.
Jurors bought glimpses of one other aspect of Bankman-Fried, like when Sassoon confirmed him describing a bunch that included FTX prospects as “dumb motherf******s.”
Above all, Sassoon was ready. When Bankman-Fried mentioned he could not bear in mind one thing, she would confront him with the proof within the type of an e-mail, or a tweet, or an excerpt from an interview.
Caroline Ellison, the previous head of Alameda Analysis, leaves Manhattan Federal Court docket in New York Metropolis after testifying throughout Bankman-Fried’s trial on Oct. 10, 2023. Ellison was among the many prosecutors’ witnesses who testified that Bankman-Fried had directed them to commit crimes.
Michael M. Santiago/Getty Photographs
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Michael M. Santiago/Getty Photographs
Caroline Ellison, the previous head of Alameda Analysis, leaves Manhattan Federal Court docket in New York Metropolis after testifying throughout Bankman-Fried’s trial on Oct. 10, 2023. Ellison was among the many prosecutors’ witnesses who testified that Bankman-Fried had directed them to commit crimes.
Michael M. Santiago/Getty Photographs
Nonetheless, Bankman-Fried lays out his protection
Regardless of the withering cross-examination from Sassoon, Bankman-Fried did get to put out his protection when he was questioned, rather more gently, by his lawyer, Mark Cohen.
At first of the direct examination, Cohen requested Bankman-Fried if he defrauded anybody or took any buyer funds. “No,” he mentioned. “I didn’t.”
Bankman-Fried additionally informed the court docket that he made “quite a few small errors and quite a few bigger errors.” The most important one, he mentioned, was not having “a devoted threat administration staff.”
“We did not have a chief threat officer,” Bankman-Fried mentioned. “We had quite a few individuals who had been concerned to some extent in managing threat, however nobody devoted to it, and there have been important oversights.”
He blamed his prime lieutenants at FTX and Alameda for mismanaging issues, together with Caroline Ellison, a former girlfriend and CEO of Alameda, who had testified he had directed her to commit crimes.
Bankman-Fried, for instance, mentioned that when Ellison led Alameda, she didn’t hedge the agency’s investments adequately, which made it weak to steep market downturns.
On the witness stand, Bankman-Fried additionally claimed he realized about issues with FTX’s financials as he went alongside and mentioned he did not know the extent to which FTX and Alameda had been truly working collectively.
It was a colourful scene
All in all, it was a spectacle.
Bankman-Fried’s testimony was essentially the most anticipated of the trial, and hours earlier than the solar rose on his first day of taking the stand on Friday, the realm in entrance of the courthouse in Decrease Manhattan was crowded with an odd mixture of journalists, curious onlookers, and crypto lovers. The primary reporter confirmed up simply after midnight to safe a seat within the courtroom.
So many individuals confirmed up that the court docket reportedly ready three overflow rooms to accommodate the group,
Creator Michael Lewis speaks at an IMF and World Financial institution occasion in Washington, D.C., on Oct. 9, 2016. Lewis, who’s simply written a e-book about Bankman-Fried, was one of many well-known individuals who attended the previous FTX CEO’s testimony.
Zach GIbson/AFP by way of Getty Photographs
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Zach GIbson/AFP by way of Getty Photographs
Creator Michael Lewis speaks at an IMF and World Financial institution occasion in Washington, D.C., on Oct. 9, 2016. Lewis, who’s simply written a e-book about Bankman-Fried, was one of many well-known individuals who attended the previous FTX CEO’s testimony.
Zach GIbson/AFP by way of Getty Photographs
The testimony additionally attracted an array of celebrities together with actor Ben McKenzie. The previous star of “The O.C.” and “Gotham” is now a “crypto skeptic” and the co-author of a bestseller about cryptocurrency.
Michael Lewis, the best-selling writer who has simply penned a e-book about Bankman-Fried, was additionally there. Sporting Hoka trainers and a down jacket, he adopted the proceedings in one of many overflow rooms earlier than he snagged a seat within the courtroom itself — not within the rows of reporters, however in a seat close to Bankman-Fried’s family and friends.
And crypto influencer Tiffany Fong, who has gained some movie star throughout the trial after she interviewed Bankman-Fried for hours when he was underneath home arrest, has summarized every day’s proceedings in video digests.
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