By Luc Cohen and Jody Godoy
NEW YORK (Reuters) -FTX founder Sam Bankman-Fried testified on Thursday at his fraud trial outdoors the jury’s presence that legal professionals at his now-bankrupt cryptocurrency trade had been concerned in key choices on the coronary heart of the case, as he sought to distance himself from duty for any wrongdoing.
Bankman-Fried, taking the witness stand hours after the prosecution rested its case offered over 12 trial days, gave testimony that match with the protection argument that he acted in good religion whereas operating FTX, which collapsed in November 2022 following a wave of buyer withdrawals.
However on cross-examination by prosecutors, Bankman-Fried usually struggled to level to particular conversations through which legal professionals accredited his actions. U.S. District Choose Lewis Kaplan stated a number of of Bankman-Fried’s responses didn’t instantly reply prosecutors’ questions.
“The witness has what I am going to merely name an attention-grabbing means of responding to questions,” Kaplan stated.
Accused of stealing billions of {dollars} from unwitting prospects, Bankman-Fried has pleaded not responsible to 2 counts of fraud and 5 counts of conspiracy. If convicted, he may face a long time in jail. Prosecutors have stated Bankman-Fried used the misappropriated funds to prop up his crypto-focused hedge fund, Alameda Analysis, make speculative enterprise investments and donate greater than $100 million to U.S. political campaigns.
The 31-year-old former billionaire, clad in a grey go well with, was referred to as to the stand in Manhattan federal court docket after his legal professionals kicked off the protection case with testimony from two different witnesses.
Kaplan determined that Bankman-Fried would initially present testimony with out jurors current so he may decide which parts of it, if any, could be admissible as proof. Prosecutors have stated Bankman-Fried shouldn’t be allowed to recommend that the involvement of legal professionals in decision-making confirmed that he lacked felony intent.
Talking in a assured tone, Bankman-Fried usually gave prolonged responses to questions from protection lawyer Mark Cohen.
Bankman-Fried stated FTX’s legal professionals had been concerned in crafting its document-retention insurance policies, organising a system underneath which FTX prospects deposited their funds into an Alameda checking account, and crafting loans that he and different executives took from Alameda.
Prosecutors have stated Bankman-Fried inspired staff to make use of encrypted messaging platforms reminiscent of Slack and Sign and auto-delete their communications to cover their tracks. Additionally they have stated he stole funds by having FTX prospects deposit cash into accounts managed by Alameda, which then lent cash to FTX executives.
Bankman-Fried is anticipated to testify to the jury on Friday. Kaplan stated he would resolve then whether or not jurors may hear his testimony about legal professionals’ involvement.
SWAYING SIDE TO SIDE
Beneath cross-examination by prosecutor Danielle Sassoon, Bankman-Fried swayed barely facet to facet and motioned together with his palms when talking. He often started responses by saying “yep.”
A lot of Sassoon’s questioning targeted on what FTX legal professionals instructed Bankman-Fried in regards to the firm’s observe of getting FTX prospects deposit funds supposed for the trade into accounts belonging to Alameda, which Bankman-Fried testified occurred for a time as a result of FTX didn’t but have its personal checking account.
When Sassoon requested if he ever spoke with legal professionals in regards to the “permissibility” of Alameda spending the deposits, Bankman-Fried paused for a number of seconds and stated, “I do not recall any conversations that had been contemporaneous and phrased that means.”
The decide despatched the jurors house for the day after Bankman-Fried’s legal professionals stated they deliberate to elicit testimony from the defendant in regards to the involvement of FTX legal professionals in key firm choices.
Authorized specialists have stated Bankman-Fried has little to lose by bucking typical knowledge and testifying to the jury, given weeks of the testimony in opposition to him by insiders portray an unflattering portrait of his character. Cohen stated Bankman-Fried’s direct testimony to the jury may final shut to 5 hours, earlier than prosecutors get an opportunity to cross-examine him.
Former shut FTX colleagues who testified for the prosecution instructed the jury that Bankman-Fried directed them to commit crimes by diverting buyer funds to Alameda and mendacity to buyers and lenders. Bankman-Fried’s dangerous determination to testify provides prosecutors the prospect to cross-examine him on these claims.
His legal professionals have stated three of his former colleagues, who’ve pleaded responsible and agreed to cooperate with prosecutors, tailor-made their testimony to implicate Bankman-Fried within the hopes of receiving lenient sentences. Bankman-Fried has maintained that whereas he made errors operating FTX, he by no means supposed to steal funds.
The prosecution rested after calling one ultimate witness – FBI agent Marc Troiano, who instructed jurors about Bankman-Fried’s use of Sign. The protection’s first two witnesses had been Krystal Rolle, Bankman-Fried’s lawyer within the Bahamas; and database knowledgeable Joseph Pimbley.
(Reporting by Luc Cohen and Jody Godoy in New YorkEditing by Noeleen Walder, Will Dunham and Matthew Lewis)
