Fried Bankman dodges pancakes during his trial testimony

Bankman-Fried was scheduled to begin formally testifying Thursday in his federal trial on criminal fraud charges. But Kaplan chose to hear some of Bankman-Fried’s testimony at a hearing without jurors present after prosecutors said parts of what the defendant planned to say were not relevant to the case.

Kaplan’s decision to have Bankman-Fried speak at a hearing means he could find himself giving the same testimony twice, depending on what the judge ultimately rules. Kaplan said he will deliver his verdict Friday morning, before Bankman-Fried begins formally testifying before the jury.

During Thursday’s hearing, Bankman-Fried spoke coherently and precisely under questioning by defense attorney Mark Cohen. Bankman-Fried said attorneys at FTX’s legal counsel signed off on the bulk of his decisions. Defendant spoke with his usual mannerisms, frequently smiling, shaking his head, and occasionally answering defense questions with his characteristic “yes” response.

But when it came time for Bankman-Fried to answer questions from federal prosecutor Daniel Sasson, he responded with uncertainty about the man who may or may not be responsible for the loss of billions in customer deposits.

Among his answers during the Public Prosecution’s interrogation were: “I don’t remember.” “I may have”; “I wouldn’t put it that way, but I think the answer to the question you’re trying to ask is yes.”

“Kaplan and the government used an evasive word to describe his efforts to answer some of their questions,” said Carl Tobias, a professor at the University of Richmond School of Law. “If the judge criticizes SBF for being evasive before the jury, he will have a very difficult time standing up to that.”

Sam Bankman-Fried’s legal risks mount as his defense fails

Prosecutors have accused Bankman-Fried of masterminding one of the largest financial frauds in history, accusing him of using billions of dollars in customer funds stolen from his cryptocurrency trading platform, FTX, to fund risky investments, dark money political contributions and lavish personal expenses. . He faces seven criminal charges, including fraud and money laundering, and could spend decades in prison if found guilty.

On Thursday, lawyers on both sides questioned Bankman-Fried about details of his deleted messages on Signal, an encrypted communications platform, and FTX’s terms of service.

According to Bankman-Fried, FTX’s lawyers agreed that automatic deletion of Signal messages, including those discussing company balance sheets, is permitted under company policy. Bankman-Fried said terms of service drawn up by FTX’s lawyers allowed Alameda to administer the loans that the plaintiffs criticized.

On multiple occasions, Bankman-Fried said his statements were supported by the company’s data retention policy, and said he wished he had them in court as a reference. What happened next apparently surprised Bankman-Fried — Sassoon gave him a printout of FTX’s data retention policy.

Bankman-Fried, whose hands shook as he clutched the papers Sassoon handed him, said the policy presented was “different from the one” he was referring to.

Other questions on Thursday included Bankman-Fried explaining some cryptocurrency terminology.

Cohen told Kaplan that when Bankman-Fried testifies to jurors starting Friday, it will likely take him five hours to answer the defense team’s questions. That would be roughly the same length of questioning of key witnesses Caroline Ellison and Gary Wang earlier in the trial.

As Bankman-Fried’s defense team prepares to present its case this week, they have indicated that they will seek to focus on proving that the defendant acted in “good faith” and never intended to defraud customers. Cohen, Bankman Fried’s lead attorney, outlined the strategy in a letter he sent Wednesday to Kaplan, writing that the former executive relied on the advice of lawyers when he made critical decisions about his cryptocurrency empire.

Former federal prosecutors monitoring the case said Bankman-Fried would have a hard time convincing a jury to take his word for it over his top aides, all of whom testified that their former boss and close friend intentionally directed them to carry out the operation. Fraud is at the heart of the issue. Government lawyers presented a wealth of documentary evidence supporting their key witnesses, and defense lawyers appeared to be struggling to poke holes in the prosecution’s case.

Legal experts said Bankman-Fried may have concluded that with the hope of an acquittal dwindling, he needed to take the stand to try to change the trial, even if doing so was risky.

“Given that Bankman Fried is losing this trial so badly, taking the stand is a Hail Mary,” said Renato Mariotti, a former federal prosecutor who focuses on financial crimes. “due to bad luck [him]”He may be down by more than just a drop.”

Neumeyer reported from Washington.