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SBF’s evasiveness undermines his case on cusp of final arguments

SBF’s evasiveness undermines his case on cusp of final arguments
Sam Bankman-Fried, founder of FTX. (Photo: Sarah Silbiger / Bloomberg via Getty Images)

After weeks listening to the government’s criminal case against him, Sam Bankman-Fried finally got his chance to respond from the witness stand. But once prosecutors took charge, the FTX co-founder didn’t fare well, appearing vague and sometimes evasive in front of a jury on the cusp of deciding his fate. 

Over two days, federal prosecutor Danielle Sassoon subjected Bankman-Fried to a painstaking cross examination, confronting the former King of Crypto with his voluminous public statements about FTX’s collapse, his humble boy genius persona and his ties to politicians and celebrities. 

He repeatedly quibbled with the wording of statements, or denied saying them at all. One after another, Sassoon pulled up news stories, interviews and Bankman-Fried’s own tweets to show what he really said.

Much of the case revolves around the relationship between companies Bankman-Fried founded, FTX and sister hedge fund Alameda Research. Both entities spiralled into bankruptcy in November 2022, allegedly exposing a yearslong misappropriation of funds at one of the world’s largest cryptocurrency exchanges. 

The prosecutor presented a chart showing how Alameda spent $11.3-billion in FTX customer funds. Bankman-Fried attempted to say he didn’t agree with the chart and Sassoon pressed him for a yes or no answer. 

“I am not asking you whether you think the exhibit is correct,” Sassoon said. 

“That’s correct,” Bankman-Fried replied. During testy exchanges like these, two jurors were seen smiling and exchanging glances. 

Final evidence

The 31-year-old danced around his answers as he wrapped up day three of his testimony in his fraud trial in Manhattan on Tuesday. His evidence will be the last the jury hears before it begins deliberations, possibly later this week. 

His decision to testify — an unusual move for a white collar defendant — was viewed as the only viable option after five former FTX employees and friends testified and accused him of masterminding a multibillion dollar fraud at FTX. 

“For him it was worth the gamble. He is trying to hang the jury and if you can get one person who buys into his version of events, then it’s worth it,” said Josh Naftalis, a former federal prosecutor. “He needed to take the punches so he could tell his side of the story.”

Sassoon pressed Bankman-Fried on why he didn’t try to figure out who spent $8 billion in customer funds at Alameda. Bankman-Fried said he was not interested in attributing blame and couldn’t recall specific employees.

“So it’s your testimony that while you were CEO of Alameda, some unknown people spent $8 billion without your knowledge,” Sassoon asked. Bankman-Fried denied that was his testimony.

Read more: The Mystery of TFX’s Missing $9bn Unravelled at SBF Trial

On the stand, Bankman-Fried distanced himself from day-to-day decisions at Alameda, which he officially stepped down from running in 2021. Even when he was the boss, it “was not my memory” that he authorised the spending of FTX customer funds. He did confirm he made key decisions about some of Alameda’s major venture investments, including in hedge fund Modulo Capital and investment firm K5.

In 2022, Bankman-Fried testified, he learned that Alameda had borrowed $10 billion from FTX but said he was more concerned with fixing the problem rather than attributing blame.

Wore down

Questioned by his attorney Mark Cohen, Bankman-Fried appeared comfortable and provided simple answers to questions about complex issues, like margin trading and Alameda’s accounts on the FTX cryptocurrency exchange. During an unusual dress rehearsal without the jury last week, Bankman-Fried’s convoluted answers drew the ire of Judge Lewis A. Kaplan, who advised him to avoid vague generalities. 

With the jury in place, he appeared to heed that warning initially, explaining in layman’s terms how he tried to get Alameda to hedge its risk against market exposure and believed the hedge fund was solvent in the weeks leading up to his crypto empire’s collapse. 

But he slowly wore down under Sassoon’s cross.

She asked him whether he offered to pay down the national debt for the Bahamas — where FTX was headquartered — and if he dined with the country’s Prime Minister Philip Davis, former US president Bill Clinton and former UK Prime Minister Tony Blair in 2022. 

Bankman-Fried responded that “there was something like a dinner”.

Sassoon replied: “when you say something like dinner, was it a dinner?”

Bankman-Fried responded: “I don’t remember whether there was food. It may have been.” The prosecutor then showed the jury a video of Clinton, Blair, Bankman-Fried and Davis together.

In follow-up questions on Tuesday, Cohen, Bankman-Fried’s lawyer, tried to repair the damage from cross-examination, allowing his client to expand on his answers to Sassoon. 

“I don’t think there was a clear point or decision at which a person or group of people decided to spend particular dollars,” he said. “There are a lot of things I don’t think I would be able to define about how I would answer that question.”

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