SBF to Testify in Fraud Trial After Onslaught From Inner Circle
Sam Bankman-Fried will take the stand to defend his actions in the lead-up to the collapse of his digital-asset empire, after taking a beating from former colleagues who painted him as the mastermind of a years-long scheme to defraud customers and investors.
The once respected crypto mogul is facing decades in prison on charges that he directed the transfer of FTX customer money into Alameda Research, an affiliated hedge fund, for risky investments, political donations and expensive real estate before both companies spiraled into bankruptcy last year.
While defendants often avoid testifying — a move that can easily cause more harm than good — it’s one of Bankman-Fried’s final defense options after facing weeks of damaging testimony from former members of his inner circle.
Three of Bankman-Fried’s closest confidantes, Alameda Chief Executive Officer Caroline Ellison, FTX’s former head of engineering Nishad Singh, and Gary Wang, a co-founder of the crypto exchange, pleaded guilty to fraud and cooperated with prosecutors. On the stand, all three pointed at Bankman-Fried as the one calling the shots when customer funds were misused.
Bankman-Fried’s lawyers had signaled it was possible he could testify. They complained to Judge Lewis Kaplan on Oct. 15 that their client wouldn’t be able to “meaningfully participate” in the trial if he didn’t get his full dose of Adderall — a drug they’ve said he needs to treat his ADHD. He has since gotten access to the medication.
Bankman-Fried’s testimony will be the first time the public will hear him speak at length in months. The FTX co-founder agreed to a gag order in July, largely preventing him from talking to the press about the case. A month later he was sent to jail after his bail was revoked over accusations he tried to tamper with witnesses.
Prior to that, Bankman-Fried was eager to share his version of events. In the month between his company’s collapse and his arrest in the Bahamas, he went on a public speaking tour to try to clear his name, saying he may have made some mistakes but never “knowingly” misused customer funds or tried to commit a crime. The day after he was arrested, he was supposed to testify before Congress. A leaked copy of his opening remarks showed he planned to admit that he “f***ed up” while still casting much of the blame for his firm’s failure elsewhere.