Sam Bankman-Fried, the defendant in a criminal fraud trial, took the stand in a unique hearing where the jury was not present. During the questioning, Bankman-Fried provided evasive and circuitous answers, often rephrasing the questions.
The hearing, which took place on Thursday afternoon, was characterized tension and unusual circumstances. The judge, US District Judge Lewis Kaplan, criticized Bankman-Fried’s responses, describing them as “interesting” but ultimately indirect when asked about his alleged use of customer funds for personal gain.
Bankman-Fried testified in a downtown Manhattan courtroom after the jurors were dismissed for the afternoon. Judge Kaplan allowed him to testify about his conversations with lawyers during his time at FTX, arguing that they demonstrated his adherence to legal procedures and good faith when the cryptocurrency exchange collapsed in 2022.
However, Judge Kaplan has previously indicated that these discussions have little relevance to the charges against Bankman-Fried, which include defrauding customers and investors and money laundering. The judge believes that such evidence should not be presented to the jury.
By the end of the hearing, Judge Kaplan appeared more skeptical of Bankman-Fried’s arguments. He drew a comparison between the defendant and someone who used stolen money to buy a house without informing their real estate lawyer about the source of funds.
Bankman-Fried’s testimony was characterized hedging and pauses. He often rephrased the questions posed to him and occasionally requested time to think. Bankman-Fried’s defense lawyer, Mark Cohen, explained that his client consulted with counsel and relied on their advice for various actions that the prosecutors deemed fraudulent.
During the cross-examination, Bankman-Fried frequently provided meandering and ambiguous answers. When questioned Assistant US Attorney Danielle Sassoon, he often replied, “I don’t specifically recall” and occasionally took a long pause before responding. Judge Kaplan had to remind Bankman-Fried to listen to the questions and answer them directly.
Bankman-Fried’s testimony touched on several issues raised the prosecutors, such as the management of customer funds, taking personal loans from the company, and the deletion of messages. His defense argued that these practices were either industry norms or approved his legal team.
The cross-examination became protracted, with Sassoon delving into matters beyond the scope of the hearing. Cohen asserted that it was a deposition, but Judge Kaplan allowed most of the questions to proceed. Bankman-Fried denied stealing customer funds and emphasized that he discussed these matters with his attorneys.
Bankman-Fried’s decision to testify added to the eventful day in court. Outside the courthouse, his parents expressed frustration with press photographers. Despite the risks involved, Bankman-Fried believed it was necessary to testify.
After Bankman-Fried’s testimony, Judge Kaplan stated that he would consider whether the statements could be shared with the jury. Bankman-Fried had previously reserved the right not to testify, but if he chooses to do so, he will face cross-examination the government in front of the jurors.
The trial will continue, and the prosecution aims to keep the proceedings concise. However, if Bankman-Fried remains unresponsive, the trial may extend further.