Sam Bankman-Fried, accused of orchestrating a colossal financial fraud leading to the collapse of FTX cryptocurrency exchange, is poised to testify in his own defence on Friday. The 31-year-old entrepreneur’s testimony is anticipated to shed light on the intricate web of financial decisions and legal involvements that have been central to the ongoing trial.
Bankman-Fried’s awaited appearance on the witness stand follows 12 days of intense legal proceedings, during which prosecutors presented evidence accusing him of siphoning billions from FTX customer funds. The alleged misappropriation was purportedly channelled into Bankman-Fried’s crypto-focused hedge fund, Alameda Research, speculative ventures, and significant political donations, which included more than $100 million to U.S. political campaigns. Additionally, Bankman-Fried faces charges related to deceptive practices against Alameda’s lenders and FTX investors.
The trial, which commenced on October 3, is reaching its climax nearly a year after FTX’s abrupt demise due to a deluge of customer withdrawals. The company declared bankruptcy in November 2022, promptly followed by Bankman-Fried’s indictment in December.
During a pre-testimony hearing, U.S. District Judge Lewis Kaplan probed Bankman-Fried about the involvement of legal advisors in pivotal decisions central to the case. The judge’s inquiry aimed to ascertain the admissibility of this information as evidence. Bankman-Fried, under the scrutiny of defense lawyer Mark Cohen, revealed that FTX’s legal team played a role in formulating document-retention policies, orchestrating the deposit of customer funds into an Alameda bank account, and structuring loans taken by executives, himself included, from Alameda.
However, during cross-examination, Bankman-Fried’s responses were marked by hesitation and ambiguity. Despite his background as the child of two Stanford Law School professors, Bankman-Fried appeared uncertain during questioning, often leaving queries partially answered. At one point, he stated, “I’m going to answer what I think the question you are asking is but I apologize if I am answering the wrong question.”
Judge Kaplan, observing Bankman-Fried’s responses, noted his unique way of addressing inquiries, suggesting an air of complexity in the proceedings.
Bankman-Fried steadfastly maintained that he did not perceive his actions as misusing customer assets for personal gain. He vehemently contested the notion that FTX customer assets were employed to acquire a stake in the rival exchange Binance, reiterating that his interactions with attorneys did not indicate such intentions.
Judge Kaplan, presiding over the case, announced his intention to make a ruling on the admissibility of Bankman-Fried’s interactions with lawyers on the following morning, setting the stage for a crucial juncture in the high-profile trial.
