19-10-2023 (NEW YORK) Startling revelations emerged during Sam Bankman-Fried’s fraud trial on Wednesday as the prosecution presented a series of profanity-laden messages that the FTX founder had sent to journalists. These messages challenged Bankman-Fried’s carefully cultivated image as a proponent of cryptocurrency oversight and shed light on his frustrations with regulators.
Despite objections from Bankman-Fried’s legal team, US District Judge Lewis Kaplan permitted jurors in the Manhattan federal court to view a profane message the defendant had sent to a reporter from the news website Vox. The message, sent shortly after FTX’s collapse in November 2022, expressed Bankman-Fried’s discontent with regulators, blaming them for exacerbating the situation.
Jurors were also shown a message, rife with expletives, that Bankman-Fried had sent to a journalist at the crypto news site The Block via Twitter, which is now known as X. In this message, Bankman-Fried made derogatory remarks about US Securities and Exchange Commission Chair Gary Gensler, suggesting that US lawmakers were foolish and on the verge of handing the industry over to Gensler. Within cryptocurrency circles, the SEC is often viewed as more adversarial towards the industry compared to the Commodity Futures Trading Commission.
The ongoing trial, which commenced on October 3, accuses Bankman-Fried of embezzling billions of dollars from FTX customer funds. The funds were allegedly used for personal investments, political campaign donations, and to support Bankman-Fried’s hedge fund, Alameda Research. Prosecutors claim that the political donations were intended to influence legislation in favor of the cryptocurrency industry.
Bankman-Fried, once a billionaire, has pleaded not guilty to two counts of fraud and five counts of conspiracy. If convicted, the 31-year-old could face a lengthy prison sentence.
Bankman-Fried’s defense team had attempted to prevent prosecutors from introducing the messages he exchanged with the Vox reporter as evidence. They argued that these messages, deemed as “off-the-cuff musings,” were sent outside the relevant time frame of the trial and that their language could bias the jury against the defendant.
However, prosecutor Danielle Sassoon argued in favor of admitting the messages, citing their significant relevance in revealing Bankman-Fried’s true state of mind at the time. Sassoon pointed out that Bankman-Fried had later informed the reporter that he believed their conversation was off the record. Ultimately, Vox published the messages.
Bankman-Fried’s defense lawyer, Christian Everdell, argued against the messages being presented as evidence, stating that Bankman-Fried’s previous statements in support of cryptocurrency regulation were merely a form of public relations and did not reflect his genuine intentions when engaging with regulators.
Prosecutors have indicated that they may conclude their case as early as October 26. Bankman-Fried’s legal team has stated that he is contemplating testifying in his own defense.
