Sam Bankman-Fried’s old statements come back to haunt him while on the stand in trial

Sam Bankman-Fried’s defense team may be rethinking its strategy of putting the former crypto king on the stand in his federal fraud trial. 

The FTX founder told prosecutors on Monday he did not remember making promises to users that their money was safe on his cryptocurrency exchange only to have that statement, and several others, come back to haunt him when the government provided proof the onetime billionaire made the statements publicly. The 31-year-old also promised users that they could ask for their money back at any time, which was also not the case. 

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Assistant U.S. Attorney Danielle Sassoon spent much of the day attacking Bankman-Fried’s credibility by highlighting statements he made leading up to and after the collapse of his cryptocurrency exchange.

Bankman-Fried and his cohorts are accused of diverting billions of dollars from client accounts for his personal use, which included making risky trades at his cryptocurrency hedge fund Alameda Research, spending sprees, and celebrity endorsement deals. He’s also accused of making illegal donations to lawmakers as part of a plan to buy power and influence crypto regulation.

He has pleaded not guilty to two counts of fraud and five counts of conspiracy tied to FTX’s 2022 implosion. If convicted of all the charges against him, he could be sentenced to more than 100 years in prison.

The government has spent the past two weeks calling 15 witnesses to the stand, including multiple members of his inner circle. Most, including ex-girlfriend and former Alameda CEO Caroline Ellison, testified that Bankman-Fried called the shots at the hedge fund and the cryptocurrency exchange and orchestrated what prosecutors described as one of the largest financial frauds in U.S. history.

Elizabeth Williams/AP

The defense has tried to paint Bankman-Fried as an inexperienced CEO who got in over his head and made mistakes in good faith. The government has pushed back on the narrative, claiming Bankman-Fried was a greedy con artist who knew what he was doing and directed others to break the rules.

Some of the day’s most heated exchanges came when Sassoon pressed Bankman-Fried on whether he knew that Alameda might not be able to pay back FTX customers. He said he wasn’t aware in June 2022 that Alameda owed billions of dollars to FTX, directly contradicting Ellison’s testimony, who said under oath that her former boyfriend and boss directed her to hide the debt owed to FTX from Alameda.

Sassoon also pressed Bankman-Fried about his prior testimony on whether Alameda Research could borrow from FTX without posting the same collateral as other customers. Bankman-Fried said he couldn’t remember, at which point the prosecutor read back his answer from last week in which he said Alameda could.

Bankman-Fried also testified that he never told Ryan Salame, a former FTX executive who has pleaded guilty, to transfer massive amounts of money raised from venture capital firms to Alameda.

“I have no memory of that,” he said, in what is a denial of the crux of the government’s case against him.

Sassoon also brought up statements Bankman-Fried made to news outlets after FTX declared bankruptcy in November and when he was charged in December 2022.

When presented with quotes he made post-bankruptcy, Bankman-Fried said he couldn’t recall what he had said in the various interviews but added that he “disagreed with nearly every article written about me then.”

Sassoon rounded out the afternoon by going over some of the biggest investments FTX and Alameda made, asking Bankman-Fried if he was the one who made the decisions. While he avoided answering the questions directly, he did not outright deny the claims.

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Despite some prickly exchanges with the prosecutor, Bankman-Fried has stayed somewhat composed during the cross-examination, sticking to iterations of “I don’t recall.”

He is expected back on the stand Tuesday.