Sam Bankman-Fried, facing charges of fraud and embezzlement in his trial in New York, took the witness stand on Friday to testify in his own defense. This marked the first time that the 31-year-old former billionaire directly addressed the 12 jurors and five alternates after 12 days of trial.
The proceedings took an unusual turn when Bankman-Fried began his testimony outside the jury’s presence. U.S. District Judge Lewis Kaplan wanted to preview Bankman-Fried’s statements about the involvement of lawyers in pivotal decisions at the core of the case to determine whether they could be admitted as evidence.
The charges against Bankman-Fried allege that he misappropriated billions of dollars in customer funds from his now-bankrupt FTX cryptocurrency exchange. Prosecutors claim he used these funds to support his crypto-focused hedge fund, Alameda Research, make speculative venture investments, and donate over $100 million to U.S. political campaigns. Additionally, he faces allegations of conspiring to defraud Alameda’s lenders and FTX investors.
Prosecutors argued that Bankman-Fried should not be allowed to use the involvement of lawyers as evidence that he lacked criminal intent.
During his testimony, Bankman-Fried revealed that FTX’s lawyers were engaged in formulating document-retention policies, establishing a system for FTX customers to deposit their funds into an Alameda bank account, and crafting loans taken by him and other executives from Alameda.
However, on cross-examination, Bankman-Fried, who has a legal background due to his parents’ roles as professors at Stanford Law School, appeared unsure at times, prompting him to hedge his answers.
“I’m going to answer what I think the question you are asking is, but I apologize if I am answering the wrong question,” Bankman-Fried stated at one point.
Judge Kaplan noted that Bankman-Fried had a unique way of responding to questions. Bankman-Fried also denied the assertion that he was using customer assets for personal purposes, particularly refuting the idea that he used FTX customer assets to purchase a stake in the rival exchange, Binance.