A squirrely Sam Bankman-Fried tried to squirm his way out of answering questions during a surprise hearing at his Manhattan federal fraud trial Thursday — as he claimed his trading firm had been “permitted” to “borrow” the $8 billion in FTX user funds he’s charged with stealing.
Bankman-Fried, 31, flailed as prosecutor Danielle Sassoon grilled him on the stand after the judge sent jurors home for the day to go over what evidence could be included within the accused crypto crook’s hotly-anticipated Friday morning testimony.
“Take heed to the query, and answer the query,” Judge Lewis Kaplan told the fallen crypto king at one point in the course of the bizarre three-hour hearing, reprimanding Bankman-Fried for giving roundabout answers.
“The witness has what I’ll simply call an ‘interesting’ way of responding to questions,” Kaplan quipped later as Bankman-Fried sat wearing a gray suit and a purple tie, with a bottle of Poland Spring water next to him on the stand.
The previous crypto golden boy seemed to be distressed throughout the hearing, staring downward, wincing — and ceaselessly telling Sassoon that he would have “phrased” questions in a different way, after which delivering rambling and long-winded answers.
During a surprise hearing at his Manhattan federal fraud trial Thursday, Sam Bankman-Fried, 31, tried to squirm his way out of answering questions.Matthew McDermott
He responded “I don’t recall” or said that he couldn’t remember certain conversations with either his ex-colleagues or lawyers no less than a dozen times.
Thursday’s hearing was partly meant to probe the scope of Bankman-Fried’s planned “advice-of-counsel” defense — which argues that he shouldn’t be held accountable for his alleged crimes because he was just following his lawyers’ advice.
But it surely also served as a kind of rehearsal for Bankman-Fried’s planned testimony before the jury — and suggested that he may struggle to clarify himself under withering cross-examination.
When asked directly whether trading firm Alameda Research’s FTX account was given the unique privilege of amassing an enormous negative balance — which ex-company executives testified was utilized in the scheme to steal customer funds — Bankman-Fried didn’t answer the query.
He claimed his trading firm had been “permitted” to “borrow” the $8 billion in FTX user funds he’s charged with stealing.William Farrington
“Um, sorry, I….,” he said, before trailing off.
After a beat, Bankman-Fried added, “I’ll make my best guess at answering your query” — but then didn’t provide a transparent explanation.
He responded “I don’t recall” when asked whether he spoke with company executives on an encrypted app about Alameda having a $13 billion debt before FTX’s November 2022 collapse.
“I don’t specifically recall such conversations,” he said.
When asked if he spoke with lawyers about depositing money from FTX users into an account controlled by Alameda, Bankman-Fried responded: “I don’t recall any conversations that were contemporaneous and phrased that way” — after which grabbed the bottle of water next to him and took a swig.
“I wish I had had conversations,” he continued, and then appeared to say that he wished he had been “more informed,” though it was difficult to make out every word of his stilted remarks.
“I’m unsure if other people were involved in conversations,” Bankman-Fried added.
Earlier, he responded “Yes, in lots of circumstances,” when his defense attorney Mark Cohen asked him whether Alameda was allowed to “borrow” money from FTX deposits.
“Did you think that you simply were managing FTX in accordance with its terms of service?” Cohen later asked.
“Yes,” Bankman-Fried answered.
Bankman-Fried flailed as prosecutor Danielle Sassoon grilled him on the stand after the judge sent jurors home for the day to go over what evidence could be included within the accused crypto crook’s Friday morning testimony.AP
However the California crypto magnate fumbled and provided a word salad answer when Sassoon later asked him an identical query.
“I feel that it gives a good little bit of discretion to how Alameda acts usually… I wouldn’t phrase it that way, but I feel the reply to the query I feel you are attempting to ask is yes.”
“I’m not a lawyer…I’m just giving as best as I can what my memory is,” Bankman-Fried later said by means of explaining his incomplete responses to Sassoon’s questions.
Bankman-Fried has pleaded not guilty to conspiracy and wire fraud charges for allegedly using greater than $8 billion in stolen FTX user deposits to fund lavish real estate purchases, political donations and to repay lenders.
Bankman-Fried seemed to be distressed throughout the hearing, staring downward, wincing – and ceaselessly telling Sassoon that he would have “phrased” questions in a different way, after which delivering rambling and long-winded answers.AP
His expected testimony comes after jurors heard earlier this month from three of his former FTX associates — including his ex-girlfriend Caroline Ellison — who flipped on him after pleading guilty.
Ellison testified that Bankman-Fried “directed her” to steal billions in FTX customer funds to repay Alameda’s massive debt, and that the accused fraudster had the ultimate say on each firms’ big decisions.
Bankman-Fried also didn’t care about following moral codes reminiscent of “don’t lie” and “don’t steal” because he felt that he was working for the “greater good” of society, Ellison told jurors.
One other of Bankman-Fried’s former top executives, Nishad Singh, ripped him for “excessively” spending a whole lot of hundreds of thousands on FTX endorsement deals with celebrities and sports leagues – while jurors were shown an image of a grinning Bankman-Fried posing with with Katy Perry, Orlando Bloom and Kate Hudson on the 2022 Super Bowl.
But Bankman-Fried’s lawyers defended FTX’s spending during cross-examination of Singh as crucial for growing the business.
Bankman-Fried faces what would effectively be a life sentence, if convicted.
