Sam Bankman-Fried to testify in his defense

Sam Bankman-Fried, the founder of the now-bankrupt FTX exchange, is gearing up to testify in his own defence as early as Thursday.

Accused of orchestrating a massive fraud scheme that allegedly involved embezzling billions from customers of his bankrupt cryptocurrency exchange FTX, the 31-year-old’s decision to take the stand comes after weeks of damning testimony against him by former colleagues.

Defence attorney Mark Cohen confirmed Bankman-Fried’s intention to testify during a court hearing on Wednesday, a bold move that grants prosecutors the opportunity to cross-examine the former billionaire. Legal experts have described this move as high-risk, given the testimonies from Bankman-Fried’s associates painting a bleak picture of his character.

Bankman-Fried, who has pleaded not guilty, has taken an unconventional approach throughout the trial. Unlike many defendants, he chose not to maintain a low profile after being charged. Instead, he publicly shared his perspective on the case through blog posts and engaged with multiple journalists.

The prosecution alleges that Bankman-Fried utilised the misappropriated funds to support his crypto-focused hedge fund, Alameda Research. Prosecutors claim that Alameda siphoned FTX funds through special trading privileges on the exchange, further accusing Bankman-Fried of making speculative venture investments and contributing over $100 million to U.S. political campaigns.

During Wednesday’s court filing, Cohen expressed his intention to question Bankman-Fried about lawyers’ involvement in structuring loans from Alameda to FTX executives, a crucial method prosecutors claim was used to divert funds from unwitting customers. Cohen argued that Bankman-Fried’s awareness of legal participation in these transactions indicates his good faith belief in their appropriateness.

Additionally, prosecutors may press Bankman-Fried on why he failed to disclose Alameda’s privileges to FTX customers or equity investors. They are also likely to question his decision to reassure the public via social media, stating FTX was “fine,” while allegedly being aware of the exchange’s multi-billion-dollar shortfall during a wave of customer withdrawals last November.

Cohen, however, emphasised that Bankman-Fried retains the right to choose not to testify, leaving the courtroom in suspense as the trial unfolds. The defence team aims to conclude its case by Friday, potentially paving the way for closing arguments and jury deliberations next week. If convicted, Bankman-Fried could face severe consequences, including decades in prison.