On Tuesday, Sam Bankman-Fried, the founder of the failed FTX cryptocurrency exchange, denied knowing that billions of dollars of customer money had been misappropriated until shortly before his company collapsed last year. Day at his criminal fraud trial.
When attorney Daniel Sassoon repeatedly asked whether FTX had told his employees not to spend client money on investments, expensive real estate and other expenses, the 31-year-old onetime crypto mogul stumbled for an answer. Mr. Bankman-Fried FTX could not name any employees who authorized the use of customer money for that expense.
“I don’t remember giving any direction,” Mr. Bankman-Fried spoke three times about FTX spending customer money before concluding her testimony. Both sides rested their case before lunchtime on Tuesday, with closing statements due on Wednesday.
Mr. Bankman-Fried testified for a third day before a jury in her own defense for a trial that symbolizes the highs and lows of the volatile crypto industry. The entrepreneur is accused of embezzling $10 billion from FTX’s customers, then using the money for lavish real estate purchases and other expenses, as well as using the funds to prop up a crypto trading company he founded. , Alameda Research.
FTX, which at its peak was valued at $32 billion, imploded spectacularly last year, leaving many customers unable to recover their deposits. Mr. If convicted, he could be sentenced to life in prison.
The first few weeks of his trial were filled with a barrage of prosecutors, who tried to convince Mr. Pointing the finger directly at Bankman-Fried, he said he led them to commit the crimes. Three of his close associates — Carolyn Ellison, Nishad Singh and Gary Wang — pleaded guilty and agreed to cooperate with prosecutors.
The accumulation of damaging evidence may have forced the FTX founder’s hand into testifying, a risky move for a criminal defendant. By taking this position, Mr. Bankmann-Fried took an opportunity to say that he had no intention of deceiving anyone and that his business decisions were made in good faith. But it allowed prosecutors to zero in on his past public statements and compare them to what he had done in private.
Mr. When Bankman-Fried initially took the stand Friday, she took questions from her own attorney, Mark Cohen. Mr. Bankman-Fried denied defrauding or stealing from FTX’s customers, but also admitted wrongdoing, citing “significant oversights” that hurt the exchange’s customers.
Under cross-examination on Monday, lawyer Ms Sassoon pressed Mr Bankman-Fried about discrepancies between his public statements and how he ran his crypto empire. He often insisted that he did not remember much of what he said publicly.
On Tuesday, cross-examination continued, Mr. Bankman-Fried focused on actions and statements made. Mr. Bankman-Fried, wearing the same gray suit and purple tie as she had worn earlier days on the stand, testified before a packed courtroom that included Damian Williams, a top federal prosecutor in New York. Missing from the gallery, Mr. Bankman-Fried’s mother, Stanford law professor Barbara Fried, attended every day leading up to the trial.
Federal prosecutor Ms. Mr. Sassoon on the failure of FTX. Bankman-Fried was interrogated, including whether some of the cooperating witnesses were not telling the truth about the Alameda trading company. . Mr. Bankman-Fried testified that he did not learn about the missing funds until October 2022, and other witnesses testified that he knew beforehand.
At one point, Ms Sassoon asked Mr Bankman-Fried if Adam Yedidia was lying when former FTX developer Adam Yedidia, who testified at the trial, told the court that Mr Bankman-Fried had told her to Alameda in the summer of 2022. FTX owes $8 billion to customers.
“I don’t remember him saying that,” said Mr. Bankman-Fried replied.
Ms. Sassoon then asked whether it was wrong for Ms. Ellison, who conducted Alameda and was at one point Mr. Bankman-Fried’s girlfriend, to testify that she and Mr. Bankman-Fried conspired with others to misappropriate FTX customers’ money.
“Didn’t you tell your employees, ‘Don’t spend FTX customer deposits’?” Ms. Sassoon asked at one point.
“I didn’t,” mr. Bankman-Fried said. “I’m really sorry I didn’t see it better.”
Do you remember providing assistance to government officials in the Bahamas based on FTX? Mrs. Sassoon asked Bankman-Fried. He said he did not recall offering courtside tickets to the FTX Arena in Miami for Bahamian Prime Minister Philip Davis and his wife. The jury was then shown screenshots of the messages he said. (The arena was renamed.)
Mr. Bankman-Fried also sued for emails to Bahamian customers offering refunds. FTX was under investigation by Bahamian regulators at the time.
During a brief diversion, Mr. Bankman-Fried tried to clarify that she did not know who in Alameda authorized the spending of FTX client money. FTX had about two dozen employees, and “I’m not particularly interested in trying to lay blame,” he said.
Jurors could begin deliberating a verdict in the case as soon as Thursday after concluding statements Wednesday.
