FTX co-founder Sam Bankman-Fried faces seven federal charges in a criminal trial taking place in Manhattan. The former crypto exchange exec is accused of misappropriating billions of dollars of customer funds for real estate, donations, political contributions and investments.
The current state of play: Bankman-Fried’s cross-examination on Monday featured a lot of “yup” and “I don’t recall” answers from SBF. He was also chided by the judge for not answering the questions asked. He was asked about a slew of things, including his “fuck regulation” comments and the “allow negative” feature. Read more here.
1:20 pm ET: No sleeping in court!
A change of plans: Court ended early for the jurors today as there was no recross and no rebuttal case — lucky them. We are officially done hearing evidence in the criminal trial of SBF.
Only the lawyers and Judge Lewis Kaplan are left in the room for the rest of the day, debating the intricacies of word choice in the charges that the judge will eventually read out to the jury at the end of the trial.
Speaking to an observer in the overflow room, opinion editor Molly Jane Zuckerman was told that today’s charge hearing could involve debates over word placement as specific as whether to include the word “but” at the beginning or end of the sentence. Scintillating stuff.
Even before lunch, however, one overflow room participant already found the proceedings slow enough to allow himself to drift off. He was woken by a marshall — “There’s no sleeping in court.”
We guess some members of the jury didn’t get the memo.
One tidbit from the morning’s case before the defense and the prosecution rested — a celebrity-studded video from the FTX Bahamas conference in May 2022. When Sam Bankman-Fried was asked by the prosecution whether he remembered attending a dinner with Tony Blair, Bill Clinton, and the Bahamian prime minister, he was unable to recall (surprise, surprise).
Fun fact: Bankman-Fried said “I don’t recall” in his answers 28 times on Monday.
Video was then played for the jury of the Bahamian prime minister, Bankman-Fried, Blair, Clinton, Katy Perry and Orlando Bloom clearly schmoozing together at the event.
Bankman-Fried also told the jury today that he has no recollection of a conversation with the Bahamian prime minister where he offered to pay off the over $11 billion Bahamas national debt. He did, however, remember that he did agree to speak with the prime minister’s son about job prospects.
Today’s cross-examination of Bankman-Fried also dealt heavily with how Alameda Research was able to spend $8 billion of FTX customer deposits. While Bankman-Fried noted that he “deeply regret[s] not taking a closer look into it,” he made it clear to the jury that he had no particular knowledge of any one Alameda employee actually making the decision to spend those funds.
During redirect later in the morning, Bankman-Fried was pressed by his own lawyer about the specifics of the $8 billion spent — “Money’s fungible anyway,” Bankman-Fried answered. He also noted that he “wasn’t particularly interested in trying to dole out blame” over how and why the money was used at all.
Bankman-Fried claimed today in court that in June 2022, when the fiat@ bug was brought to light, he was not told about the specifics of the bug. He said that he merely “overheard” the phrase “fiat@” being spoken in his vicinity. When asked why he didn’t press his employees for specifics, SBF said that he did — but was told “I’m busy, stop asking questions.” Cue the laughter.
After this afternoon’s charge hearing, we can potentially expect to hear both the prosecution and the defense’s closing statements tomorrow. We’re in the end zone.
9:50 am ET: One more time
Bankman-Fried is back on the stand for a final time.
The prosecution told the court on Monday that lead prosecutor Danielle Sassoon will spend roughly two more hours on her cross with the former FTX CEO. Defense attorney Mark Cohen believes he’ll also need roughly two hours in their redirect.
Given that schedule, it’s most likely Bankman-Fried’s last day on the stand.
On Monday, there were four sidebars, so it seems that Judge Lewis Kaplan’s request that sidebars be kept to a minimum is being respected by both the prosecution and the defense.
Let’s talk about one of those sidebars, which mentioned former FTX head of institutional sales Zane Tackett. When the defense and prosecution huddled with Kaplan, both Cohen and Sassoon pleaded their cases as to why a passage from Michael Lewis’ “Going Infinite” should or should not be admissible.
Read more: SBF book ‘Going Infinite’ is a ‘glaringly incorrect representation of the facts’
According to Lewis, a conversation happened between SBF and former head of engineering Nishad Singh back in November of 2022 where Singh told Bankman-Fried that he needed to know what to tell Tackett. Bankman-Fried allegedly said, “Well, I will say tell him we didn’t do anything wrong. I didn’t, you didn’t.”
Singh, however, admitted on the stand a few weeks ago that he did indeed plead guilty to charges following the collapse of FTX.
The passage, described by the prosecution as being “a false exculpatory and inadmissible hearsay,” was left out of Cohen’s direct after the objection was sustained by Kaplan.
Kaplan, outside of telling Bankman-Fried to focus on answering the questions, also got a few quips in.
At one point, as Sassoon focused on the transfer of Robinhood stocks allegedly to Bankman-Fried, though he contested the point. Bankman-Fried, it’s important to note, was one of a few owners of FTX and Alameda (the others being FTX co-founder Gary Wang and potential stakeholder Singh).
SBF was, however, the sole board member of Alameda. A lonely job, for sure.
Kaplan interrupted Sassoon’s line of questioning by verifying that SBF owned 90% of the stock, to which he agreed.
“So did you become director by mistake or accident or something else?” Kaplan asked.
As we await further testimony from Bankman-Fried, we wanted to set the record straight. Yesterday, our court reporter lost track of Bankman-Fried’s favorite answer (“yup”) after roughly 42 yup’s.
According to court transcripts, Bankman-Fried answered “yup” 282 times on Monday.
…yup.
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Source: https://blockworks.co/news/sbf-trial-day-16