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Sam Bankman-Fried blames FTX lawyers in surprise judge-only testimony

In a rare move, disgraced former ‘crypto king’ Sam Bankman-Fried took the stand without the jury

Bevan Hurley
From the Daniel Patrick Moynihan United States Courthouse in Manhattan
Thursday 26 October 2023 23:19 BST
Sam Bankman-Fried Taking the Stand Depends on His 'Personality,' Lawyer Says

Sam Bankman-Fried gave a hint at his likely “blame-the lawyers” defence strategy as he took the stand without the jury present on Thursday afternoon.

The 31-year-old’s highly-anticipated witness testimony took an anti-climactic turn as Judge Lewis Kaplan took the rare step of sending the jury home after lunch so the judge could hear parts of the evidence that are in dispute.

Mr Bankman-Fried’s admissible evidence will begin on Friday morning in a federal courthouse in Manhattan.

But before that could begin, he was quizzed by Judge Kaplan on FTX’s use of auto-deleting messages on encrypted apps such as Signal, payments to its Alameda Research hedge fund, and how loans between the two companies were structured.

Prosecutors have accused Mr Bankman-Fried of stealing billions in customers’ investments in the now-bankrupt FTX crypto exchange to prop up his failing hedge fund Alameda Research, invest in high end real estate, fund sponsorship deals and make political contributions.

On Thursday, he told the judge that he had only “skimmed” FTX’s terms of service that determined the loans between FTX and Alameda.

He said it was FTX’s in-house lawyers who decided how the loans should be structured, and that Alameda general counsel Dan Friedberg was responsible for document retention.

Wearing a grey suit and purple tie, Mr Bankman-Fried gave confident responses to some questions, elsewhere his answers were vague and meandering.

Mr Bankman-Fried repeatedly answered “I don’t recall”.

Sam Bankman-Fried’s testimony will resume on Friday before the jury (REUTERS/Jane Rosenberg)

Mr Bankman-Fried took the stand after hearing weeks of damning testimony from former FTX executives who described in detail how he allegedly oversaw the systematic syphoning of billions of dollars of customer funds from the crypto exchange.

SBF’s highly anticipated testimony drew an array of crypto influencers and high-profile personalities from the broader tech world.

Ben McKenzie, the actor-turned investigative journalist, was in attendance, along with Jacob Silverman, his co-author on Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud.

Several overflow rooms were packed to hear Mr Bankman-Fried testify.

After the prosecution rested its case earlier on Thursday, Mr Bankman-Fried’s lawyers called two witnesses to testify.

Krystal Rolle, a Bahamas-based attorney, who represented SBF after the collapse of FTX, and financial risk assessment expert Joseph Pimbley.

As witness questioning dragged on in the morning, Judge Lewis Kaplan made no effort to hide his exasperation at how long it was taking.

Sam Bankman-Fried took the stand without the jury present on Thursday (Associated Press)

In response to lengthy cross-examination of Mr Pimbley, the 78-year-old judge quipped that when he was asked to count how much smoked fish had been sold in his father’s deli, he didn’t have to count the pastrami.

Earlier when defence attorney Christian Everdell repeatedly asked the prosecution’s final witness Marc Troiano to read details from a chart before the court, Judge Kaplan joked he should ask who Johnny Podres was.

“He was a pitcher for the Brooklyn Dodgers,” Judge Kaplan clarified. Podres won four World Series titles during the era when the franchise relocated to Los Angeles in 1958.

Mr Bankman-Fried has pleaded not guilty to seven counts of fraud and money laundering. He faces up to 110 years in prison if convicted.

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