Sam Bankman-Fried Testifies During Special Hearing—After The Jury Is Sent Home

The former CEO of the failed FTX exchange took the stand for an audience of one, so Judge Lewis Kaplan could vet the admissibility of his statements.

André Beganski3 min read

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Sam Bankman-Fried took the witness stand during his criminal trial on Thursday. But as the former crypto mogul spoke, the jury was nowhere to be found.

U.S. District Judge Lewis Kaplan—who presides over Bankman-Fried’s case—sent the group home around 2:00 pm. To assess whether certain topics should be precluded from Bankman-Fried’s testimony tomorrow, Judge Kaplan called for a special hearing.

“We’re in the home stretch,” Kaplan said to the jurors as they were let go, assuring them that the weeks-long court case would likely conclude next week. 

During the hearing, Bankman-Fried’s lead lawyer Mark Cohen of Cohen & Gresser walked his client through several topics, such as meetings Bankman-Fried had with regulators in the Bahamas last November and advice he received from counsel at FTX.

On cross-examination, Assistant US Attorney Danielle Sassoon was less gentle. She pressed the one-time wunderkind with a slew of questions, focussing on his lawyers’ advice at various points. On occasion, she appeared to go beyond that.

At one point, she asked Bankman-Fried whether “embezzling customer funds” would be considered safeguarding customer assets. Judge Kaplan sustained an objection from the defense—ruling that Sassoon’s question was beyond the scope of the hearing.

Bankman-Fried answered anyway, and he indicated no. “I felt the need to answer that one,” he added while cracking a smile. 

While Bankman-Fried’s testimony tomorrow could be a make-or-break moment as he tries to score points with the jury, Thursday afternoon was effectively a warmup.

During his testimony on Thursday, Bankman-Fried said that he was under the impression his trading firm Alameda Research was allowed to spend FTX customer funds under a Payment Agent Agreement Alameda had with his exchange.

“I should preface this with the fact that I am not a lawyer,” he said, as Sassoon asked him to identify a portion of the agreement that gave Alameda the right. “I did not do a careful reading of this document.”

Bankman-Fried will be the final witness to testify in his criminal case. He faces a maximum sentence of 110 years in prison across seven fraud and conspiracy charges. He stands accused of pilfering billions of dollars of funds from FTX’s customers.

As Sasson peppered Bankman-Fried with questions, the former crypto mogul gave lengthy responses that often boiled down to, “I don’t recall.” 

Sassoon’s questions covered his use of encrypted messages at FTX, personal loans, and whether his trading firm Alameda Research was allowed to spend customer funds under a Payment Agent Agreement between FTX and Alameda.

“The answer is, ‘You don’t remember,’” Kaplan said to Bankman-Fried after a particularly wordy response. The judge later remarked that Bankman-Fried had an “interesting way of responding to questions.”

Prior to Thursday, the jury heard Bankman-Fried speak only in video clips. Prosecutors played a snippet of him addressing Alameda Research’s name on a podcast in one instance, while remarks he gave before Congress on crypto were highlighted in another. 

Judge Kaplan said he would determine what aspects of Bankman-Fried’s testimony are proper tomorrow, indicating that the jury could hear Bankman-Fried speak on Friday.

Edited by Ryan Ozawa.