Sam Bankman-Fried Takes the Stand – In a Preview for the Judge – Testimony is Risky Last Ditch Effort to Avoid Decades-Long Sentencing
The high-profile trial of Sam Bankman-Fried has moved to a new phase as the prosecution rests and his defense gets to put forth their own case and call their own witnesses.
And right on the first day, SBF has taken the stand to testify in his own defense but, in an unusual decision, it was, at first, without the jury present.
Judge Lewis Kaplan said a ‘number of areas of potential testimony’ were flagged by the prosecution and he said the jury should not hear it before he has a chance to rule on it. Once the Judge makes a decision, the jury will be brought back in.
One of the issues deals with Signal app channels. Earlier in the trial, the court heard that Bankman-Fried was the one who set the app to auto-delete messages.
In his Judge-only testimony, Bankman-Fried said that he was acting within ‘FTX’s document retention policy’ when he did so.
Daily Mail reported:
“He said: ‘As a general matter those were not channels where there would be formal business records. They were not channels in which decisions would be announced or enacted or documents relevant to regulatory inquiries were intended to be discussed’.
Bankman-Fried said it was for ‘chatter’ and conversations which he likened to ‘someone wandering over to my desk’ and asking him if they ‘have any thoughts about the Japanese regulatory environment right now’.”
The crypto bro is expected to claim that he was taking advice from his lawyers and that there was ‘nothing improper’ about FTX’s finances.
It means that he claims he believed having FTX customers deposit money in Alameda was permitted, because of payment agreements he had signed.
“He told the court that it took a ‘couple of years’ for FTX to get its own bank accounts and before then customers sent their money to Alameda and it appeared in their FTX wallets. Asking about FTX’s terms of service, Bankman-Fried said he believed he was managing the company within those terms.
Bankman-Fried’s lawyer Mark Cohen asked him: ‘Did you take comfort from the fact the lawyers had structured the loans?’ ‘Yeah of course’, said Bankman-Fried.”
Judge Kaplan’s decision to hear him outside the jury’s presence came after prosecutors finished presenting their case that Bankman-Fried steal billions of dollars from customers.
Reuters reported:
“The prosecution rested its case after presenting 12 days of testimony in federal court in Manhattan in which former close FTX colleagues told the jury he directed them to divert customer funds to his hedge fund and lie to investors and lenders.”
Defense lawyers argue that his former colleagues-turned-cooperating-witnesses ‘tailored their testimony to implicate Bankman-Fried in the hopes of receiving lenient sentences.’
“Defense lawyer Mark Cohen said Bankman-Fried’s direct testimony could last close to five hours, before prosecutors get a chance to cross-examine him.”
SBF’s testimony is a last-ditch effort by the defense. His close personal collaborators and friends testified that he ‘knowingly commingled fund from FTX customers with Alameda Research’s investments.’
The testimony is also quite risky for him, as it opens him up for cross-examination from prosecutors. Furthermore, the judge could lengthen his sentence if he is caught lying on the stand.
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