Sam Bankman-Fried plans to testify at his criminal fraud trial after his closest associates blamed the former billionaire for the collapse last November of his FTX cryptocurrency exchange.
In a telephone conference on Wednesday with Lewis Kaplan, the judge who is overseeing the case in a federal court in Manhattan, Mark Cohen, Bankman-Fried’s lawyer, said the defence planned to call three other witnesses to testify briefly after prosecutors finished presenting their case. “Our client is also going to be testifying,” he said.
Taking the stand could allow Bankman-Fried, who has pleaded not guilty to fraud and conspiracy charges, to tell jurors face-to-face that while he made mistakes running FTX, he had not intended to steal customers’ money. Testifying carries significant risks, however, and will subject Bankman-Fried, 31, to a tough cross-examination by prosecutors armed with documents, messages and testimony from co-operating witnesses.
Three former members of Bankman-Fried’s inner circle, who pleaded guilty and agreed to co-operate with prosecutors, testified that he had directed them to commit crimes and was aware that his Alameda Research hedge fund had taken billions of dollars from FTX customers without their consent. Prosecutors have said that Bankman-Fried used that money to prop up Alameda, to make speculative investments and to donate more than $100 million to political candidates and campaigns.
In the three weeks since the trial began, they have tried to prove that Bankman-Fried intended to defraud his customers, Alameda lenders and FTX equity investors.
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Defence lawyers have said some activities that prosecutors said amounted to theft of customer funds, such as granting Alameda special privileges to trade on FTX, were reasonable business decisions for Bankman-Fried to have made at the time. They also have sought to blame FTX’s collapse on Bankman-Fried’s inner circle, including Caroline Ellison, his former girlfriend and the Alameda chief executive, saying they tailored their testimony in the hope of receiving lenient sentences.
On the witness stand, Bankman-Fried may have to explain text messages previously shown to jurors, indicating he knew about the funds shortfall when he posted on Twitter that FTX was “fine” only days before the exchange’s demise. The case continues.
