When Sam Bankman-Fried took the stand Thursday, a packed crowd of onlookers saw firsthand why defendants typically don’t testify in their own criminal trials, with prosecutors speaking without jurors present. The hours-long cross-examination came with harsh criticism of the disgraced cryptocurrency founder.
Bankman-Fried’s attorneys said for the first time in a conference call Wednesday that their client would testify in his own defense, and filed a lengthy court document that evening laying out the topics they planned to address.
The trial resumed Thursday morning after a brief recess, with prosecutors calling their final witness — an FBI agent — before closing their case. The judge presiding over the case, Lewis Kaplan, said he did not believe the proposed subject of Bankman-Fried’s testimony had sufficient grounds to argue before the jury. Instead, Kaplan held an unusual rehearsal hearing, hearing direct and cross-examination after sending the 12-person jury home.
Weird lawyer
Defense attorney Mark Cohen continued direct examination, calling a visibly haggard Bankman-Fried to the witness stand. After three weeks of testimony from his closest friends who testified that they stole client funds from FTX at his direction, Bankman-Fried finally got a chance to tell his side of events.
His attorneys focused on four areas of Kaplan’s suspicions that should be argued before the jury: the automatic deletion policy of members of FTX’s inner circle on the messaging platform Signal, Bankman-Fried’s so-called “attorney’s advice” defense, protection of comprehensive client assets in wallets, and a series of major meetings with the Bahamas’ financial regulator.
Bankman-Fried persisted under leading questions from his own lawyers, confidently answering that he was running his cryptocurrency empire in good faith with the advice of lawyers including Chief Regulatory Officer Dan Friedberg . Bankman-Fried placed the blame on former FTX lawyers, as revealed in a series of court filings by Bankman-Fried’s current attorneys.
Bankman-Fried argued that everything from FTX’s terms of service to its unorthodox and potentially illegal bank account convoluted were orchestrated by the previous attorney, providing cover for his decision to exploit client assets for his own purposes.
After a smooth direct inspection, Bankman-Fried’s father, Joe Bankman, came over, smiled and gave him a thumbs up.
ruthless cross
The drawbacks of Bankman-Fried’s testimony soon became apparent: Assistant U.S. Attorney Danielle Sassoon delved into his decision to blame his former attorney, asking him a series of probing questions, asking Did he have specific conversations with him. Friedberg or FTX General Counsel Can Sun regarding the theft of customer assets.
Bankman-Fried responded in his signature format, a series of misdirections, “yeahs,” and the stuttering words that previous interviewers had encountered describe As a “word salad” approach. While this might have worked for unsuspecting reporters in the past, Sassoon and Kaplan weren’t amused. At one point, Kaplan instructed Bankman-Fried to speak more clearly, noting that he had an “interesting way of answering questions.”
Sassoon seemed to unravel every thread of the defense’s argument, even pointing out that Bankman-Fried’s method of automatically deleting signal messages seemed inconsistent with a document retention policy that the defense could not even establish.
In a tense moment, Sassoon pulled out a payment agreement between FTX and its trading firm, Alameda Research, and asked Bankman-Fried to find the section that he believed allowed him to use FTX customer deposits for his own purposes. After a long pause, Bankman-Fried acknowledged that he had not “read carefully” the document “at the same time.”
Even without a jury present, Sassoon didn’t back down. Near the end of her questions, she asked Bankman-Fried how she defined protecting client assets.
“Does that include not misappropriating client assets?” she asked.
Kaplan was quick to dismiss the defense’s objections, but the point was made to a room packed with reporters, Oak star Ben McKenzie and FTX Chronicle writer Michael Lewis, who sat in Bankman Fried’s friends and family area.
After cross-examination, Kaplan further questioned whether Bankman-Fried would claim he followed his lawyer’s advice because a bank robber cannot use illicit funds to purchase an apartment, even if he had the lawyer’s unknowing signature. .
Kaplan said he will decide Friday morning whether to allow testimony before the jury.
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