Sam-Bankman Fried Takes the Stand In Court, But With No Jury
FTX founder Sam Bankman-Fried testified for the first time during his own fraud trial on Thursday, in what expert onlookers are calling a “hail mary” to rescue himself from conviction.
The examination pertained to scandalous private Signal messages he’d shared with his former colleagues, and whether or not he was ever authorized to delete such messages.
Skimming the Terms of Service
As reported by CNN, Bankman-Fried argued that using heavily encrypted messaging apps like Signal was necessary to shield the company against “constant attempts to hack FTX. Meanwhile, he claimed used an “auto-delete” function on the app since Signal was typically a place for chatter rather than discussing policies or business records.
When asked by prosecutors if he believed deleting seven spreadsheets provided by Caroline Ellison showing different versions of FTX’s balance sheet was permissible, Bankman-Fried answered “yes,” according to Inner City Press.
Judge Kaplan dismissed the Jury for the testimony and will determine later if it can be repeated to jurors.
One of his defenses involved blaming his lawyers for recommending that he structure payments from Alameda to himself and others as loans, rather than dividends. He took comfort in knowing that his lawyers had recommended this method as a means of avoiding double taxation.
The ex-boss claimed to have “skimmed” FTX’s terms of service, which were drafted by both in-house and outside lawyers. When asked if he thought Alameda’s loans from FTX were in line with the TOS, he said “Um, yes, under many circumstances.”
Dodging Questions
As with many examples of his prior interviews on the matter, Bankman-Fried’s testimony was riddled with stuttering, vague, and meandering answers, claiming he “didn’t know” or “didn’t recall” many details when put under cross-examination.
At one point during cross-examination, Judge Kaplan called on the ex-CEO “listen to the question, and answer the question directly.”
According to CNN, Bankman-Fried fidgeted more and sipped more water between questions as the examination continued. When asked if he believed Alameda could spend FTX customer deposits, the founder said “I wouldn’t phrase it that way but I think the answer to the question I think you’re trying to ask is ‘yes.’”
Anthony Scarmucci – the founder of SkyBridge Capital who was close to Bankman-Fried – said in a Wednesday interview that Bankman-Fried decision to take the stand is “a very bad move for him” He added that he regrets introducing the founder to world leaders.
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