In a pivotal moment during his trial, former cryptocurrency magnate Sam Bankman-Fried took the stand to testify before Judge Lewis Kaplan. This critical juncture occurred after the jury had been dismissed to allow the judge to determine which segments of his testimony would be admissible as evidence.
The 31-year-old stands accused of deceiving investors, defrauding lenders, and embezzling funds from customers of his now-defunct cryptocurrency exchange, FTX. He maintained that his actions were undertaken in good faith, guided by legal counsel.
The decision to send the jury home temporarily granted Mr. Bankman-Fried and his legal team an opportunity to rehearse his testimony before potentially facing the jury. During his testimony, Mr. Bankman-Fried defended various decisions that the prosecution had scrutinized. It included his choice to set certain group chats to delete automatically, which he asserted was in line with record-keeping policies established by his legal advisors.
He also revealed that he had discussed multiple arrangements with his legal team, encompassing personal loans received from Alameda and its role as a “payments processor” for FTX. When asked if he derived comfort from the fact that lawyers structured the loans, Mr. Bankman-Fried replied, “Yeah, of course,” underlining his trust in his legal team’s professionalism in preparing applications for his companies’ bank accounts.
The prosecution, however, contested Mr. Bankman-Fried’s reliance on legal advice, arguing that its relevance hinged on whether his attorneys were fully informed. Judge Kaplan refrained from immediately ruling on the admissibility of Mr. Bankman-Fried’s testimony but expressed skepticism about some of his arguments.
Initially, Mr. Bankman-Fried presented his testimony with clarity and confidence. Yet, under the relentless questioning of prosecutor Danielle Sassoon, his confidence wavered. She probed when he had consulted with lawyers and what information he had conveyed to them. At one point, Judge Kaplan instructed him to “listen to the question and answer directly.
When asked about his understanding of whether Alameda could utilize FTX customer funds, Mr. Bankman-Fried replied, “I wouldn’t phrase it that way but … yes.” After more than a minute of searching, he eventually pointed to a line in a policy between the two firms that suggested the funds could “be held and transferred. The presiding Judge, Lewis Kaplan, will issue his ruling on Friday, determining which aspects of Mr. Bankman-Fried’s testimony may be presented before the jury.
