Sam Bankman-Fried Testifies at Trial (Without The Jury)
It all comes down to this!
FTX Founder Sam Bankman-Fried testified in his trial Thursday — and the jury wasn’t even there.
Judge Kaplan had all 12 jurors removed before SBF took the stand to vet what his lawyers were prepared to include as part of his defense during a private hearing.
This morning, Judge Kaplan will decide whether he’ll allow SBF to mention he had operated FTX and Alameda based on certain legal assurances he had received from lawyers at the time.
And look, I don’t want to be dramatic here, but as I’ve previously reported, SBF is down bad. His defense team has failed to deliver on the first two pillars of his defense strategy, and the third now hangs in the balance.
Undermine the credibility of the government’s key witnesses
Complicate the government’s narrative with added complexityTry to present a lack of criminal intent
If Judge Kaplan rules in favor of allowing Sam’s testimony to include assurances he received from lawyers that he wasn’t breaking the law – it seriously calls into question his criminal intent. And as we’ve covered, that’s pretty much the whole chalupa in white collar criminal defense.
During his testimony Thursday, a cool and collected SBF swiftly made it through about 30 minutes of questions from his own attorney. The mental gymnastics kicked in under cross-examination when the questions were coming from the prosecution.
Sam stalled a few times by drinking from a water bottle and followed by mentioning more than a few times he couldn’t completely recall things. At one point he showed of hiss brassiness by completely disregarding his legal team and barreled into answering lead prosecutor Danielle Sassoon’s question despite a successful objection from his lawyer Mark Cohen:
Sassoon: Would your views on safeguarding assets include not embezzling customer assets, for example?
Cohen: Objection!
Judge: Sustained.
SBF: Yes, it would include that.
Cohen: You didn't have to answer if it was sustained. Haven't you been sitting here for four weeks?
SBF: I felt the need to answer that one.
*smiles*
Laughter in court.
As long as he answers truthfully and to the best of his ability, there isn’t much wrong with that. Lean into it too much, however, and a jury can start to glean you might purposefully be dodging the question. And everyone knows: Only guilty people (and politicians) dodge questions.
In her strongest moment, lead prosecutor Danielle Sassoon asked SBF where in the FTX terms of service it said he could use customer funds as he saw fit. Sam paused to flip through for what felt like a minute.
Sam responded by starting with the disclaimer, “I’m not a lawyer,” and proceeded to walk through how he believed FTX customer deposits were looked at as Alameda’s liabilities, and how the two companies interacted via a signed payment provider agreement.
Overall, much of Sam’s responses boiled down to what he had told me was a large part of his defense as early as three months ago: Lawyers said it was fine.
As he wrapped up the discussion of whether the jury would hear any of this tomorrow, Judge Kaplan echoed a lot of what Bernie Madoff’s former prosecutor Marc Litt told me about Sam’s proposed defense:
"Just because a lawyer tells you something is OK, that's not a defense. That's ... an excuse."
Judge Kaplan wondered aloud to the same tune in the final moments of court Thursday. Sam’s defense team responded by saying that it very well could be the case – but that the jury should be the one to decide if it’s just an “excuse” or not.
For most reporters in the courtroom, it seems like they’ve already made up their minds that the jurors will agree with them in assuming Sam is guilty before the trial even concludes. Indeed, Sam stalling to answer questions might do little to change that appearance.
However, Sam’s team getting to open the door to hint that Sam may not have been operating with criminal intent but rather simply following the advice of his lawyers could be a game changer.
In other news, I caught up with Bitcoin investor Anthony Pompliano this week to chat about the possibly imminent Bitcoin ETF and what it means for crypto. Coinage NFT holders can watch ad-free, or, check it out on YouTube.