6-10-2023 (NEW YORK) Sam Bankman-Fried, the founder of the now-bankrupt cryptocurrency exchange FTX, may take the stand on Thursday as prosecutors near the end of presenting their case against him. Bankman-Fried is facing accusations of stealing billions of dollars from customers. Defense lawyer Mark Cohen confirmed in a court hearing on Wednesday that Bankman-Fried will testify in his own defense, a bold move that will allow prosecutors to cross-examine the 31-year-old former billionaire regarding allegations made by former colleagues who claim he instructed them to commit crimes.
Legal experts believe that Bankman-Fried has little to lose by testifying, considering the unfavorable testimonies given by insiders that have painted a negative picture of his character throughout the trial. Taking an unconventional approach for a criminal defendant, Bankman-Fried has been vocal about his perspective on what transpired, publishing blog posts and engaging with journalists after being charged.
Bankman-Fried has pleaded not guilty and maintained that although he made mistakes while running FTX, he never had any intention of stealing funds. His defense team has argued that three former colleagues, who have already pleaded guilty and agreed to cooperate with prosecutors, tailored their testimonies to implicate Bankman-Fried in the hope of receiving lenient sentences.
Prosecutors allege that Bankman-Fried misappropriated funds to support his crypto-focused hedge fund, Alameda Research, engage in speculative venture investments, and donate over $100 million to U.S. political campaigns. They also claim that Alameda looted FTX funds through special trading privileges on the exchange.
The prosecution anticipates calling one final witness, FBI agent Mark Troiano, when the trial resumes in federal court in Manhattan. Cohen stated that the defense plans to present three brief witnesses before Bankman-Fried takes the stand.
In a court filing on Wednesday evening, Cohen informed the judge that he intends to question Bankman-Fried about the involvement of lawyers in structuring loans from Alameda to FTX executives. Prosecutors argue that this was a primary method used by Bankman-Fried and others to misappropriate funds from unsuspecting customers. Cohen argued that Bankman-Fried’s knowledge of the lawyers’ involvement would support his belief that there was nothing inappropriate about the loans.
Prosecutors may question Bankman-Fried about why he failed to disclose Alameda’s privileges to FTX customers or equity investors, as well as why he posted on social media assuring that FTX was “fine” during a period of significant customer withdrawals when he knew the exchange was short of billions of dollars.
Cohen stated in the letter that Bankman-Fried reserves the right to decide whether or not to testify.
Cohen also mentioned in an earlier conference call that the defense could conclude its case by Friday, allowing for closing arguments and jury deliberations in the following week. If convicted, Bankman-Fried could face a lengthy prison sentence.
