During the ongoing trial to defend himself against charges of defrauding and conspiring to defraud numerous individuals, including FTX customers and investors, Sam Bankman-Fried, the founder of FTX, faced a challenging moment on Monday. An assistant U.S. attorney presented him with a document where he was identified as the chairman and sole board member of Alameda Research. However, Bankman-Fried’s response, stating that he did not intend to be, did not directly address the question at hand.
Sam Bankman-Fried’s testimony in court has become increasingly intriguing, particularly now that the defendant himself has taken the stand. This case is gaining attention, and the outcome of the trial holds significant implications.
The Thorny Exchange
One of the most notable exchanges during Monday’s testimony revolved around whether Bankman-Fried was the sole board member of Alameda Research. The back-and-forth between Bankman-Fried and Assistant U.S. Attorney Danielle Sassoon raised eyebrows in the courtroom:
Sassoon: “Do you see at the top where it says ‘Alameda Research, Unanimous Consent of Board of Directors, Stock Transfer’?”
Sassoon: “This is transferring the Robinhood stock to yourself, right?”
Bankman-Fried: “Transferring it from one company that I was a partial owner of to another company I was a partial owner of. Sorry. I’m not sure it says it’s transferred to me.”
Sassoon: “You owned the company it was transferred to, right?”
Bankman-Fried: “I was one of the owners of both the companies.”
Sassoon: “You were the only member of the board?”
Bankman-Fried: “It looks like it.”
Sassoon: “Were you in fact the only member of the board?”
Bankman-Fried: “I’m not sure which board this refers to.”
This exchange continued, leading Judge Lewis Kaplan to intervene and question Bankman-Fried’s ownership stake in Alameda Research.
The Challenge for Bankman-Fried
Bankman-Fried’s testimony had its moments. When questioned by his defense attorney, Mark Cohen, he presented a compelling explanation of FTX’s collapse, potentially swaying the jury in his favor. However, Sassoon’s line of questioning exposed Bankman-Fried’s less convincing side. His long-winded and evasive responses, reluctance to answer directly, and tonal issues undermined the strength of his testimony.
Additionally, Bankman-Fried’s difficulties in providing coherent responses and contradicting the testimonies of key prosecution witnesses further compounded his challenges. These two issues combined make it harder for Bankman-Fried to establish his credibility and deliver satisfactory answers, both substantively and in terms of clarity.
Impact on the Trial
The ultimate question remains: How will the jury perceive the witnesses’ testimonies? Will the parade of prosecution witnesses carry more weight than Bankman-Fried and his limited defense? After evaluating Bankman-Fried’s performance on Monday, the answer to that question may be clearer.
On one hand, Bankman-Fried’s responses and demeanor do not present him as a compelling or truthful witness. Judge Lewis Kaplan had to repeatedly instruct him to answer the actual question asked using simple and direct language.
On the other hand, Sassoon skillfully exploited Bankman-Fried’s weaknesses. She challenged his clarity and memory, highlighting inconsistencies between his statements and the evidence presented. Notably, she questioned Bankman-Fried about a marketing deck from FTX that he struggled to read accurately, causing laughter in the courtroom.
Moreover, Sassoon suggested that Bankman-Fried may have lied under oath before the House Financial Services Committee and drew attention to his self-promotion efforts, which he denied remembering. These instances chip away at Bankman-Fried’s credibility.
Throughout the trial, the jury’s perception of the witnesses’ trustworthiness and the weight they attach to their testimonies will be crucial in determining the outcome.
The trial continues, and the spotlight remains on Sam Bankman-Fried’s performance. It is clear that his ability to provide solid and consistent responses, as well as regain his credibility, will significantly impact the jury’s decision.
As the trial unfolds, the State of Crypto newsletter will continue to closely observe and report on the developments. Stay tuned for further analysis and insights.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.