Sam Bankman-Fried has stepped down from the stand, after four days of testimony in his criminal fraud trial.
“That concludes the presentation of evidence in this case,” Judge Lewis Kaplan announced just after noon ET on Tuesday as he sent the jury home from the Manhattan court. Closing arguments are set to begin at 9:30 am ET on Wednesday.
Tuesday’s testimony delivered some of the most potentially damning blows yet to his defense, which has hinged on Bankman-Fried’s narrative that he made honest mistakes as a startup founder.
Prosecutors say former billionaire Bankman-Fried used his crypto exchange, FTX, as his own personal piggy bank, using the money he took from customers to enrich himself and his family, buy luxury beachfront property in the Bahamas and funnel millions into US political campaigns.
Bankman-Fried, 31, testified Tuesday that he knew as early as 2020 that FTX customer funds were being held in a bank account controlled by FTX’s sister company, the hedge fund Alameda Research. He said he does not recall giving any directions to Alameda employees to safeguard those funds.
The government has countered that Bankman-Fried was well aware that he was misrepresenting key aspects of his business to investors, customers and lawmakers in Congress. He has pleaded not guilty to seven counts of fraud and conspiracy.
His decision to testify is seen as a Hail Mary from a defense that has struggled to poke holes in the testimony of several high-ranking executives from Bankman-Fried’s former inner circle.
US Assistant Attorney Danielle Sassoon continued her aggressive cross-examination Tuesday morning, highlighting, among other things, that Bankman-Fried appeared to have a cozy relationship with members of the Bahamian government.
Bankman-Fried testified that he attended a dinner with the island nation’s prime minister, alongside former US president Bill Clinton and former UK Prime Minister Tony Blair.
In November last year, after FTX had frozen customer withdrawals amid a liquidity crunch, Bankman-Fried offered to open up withdrawals for all Bahamian customers. Bankman-Fried testified he did open those withdrawals “for a short period.”
Bankman-Fried also testified that he doesn’t recall ever directing Alameda employees not to spend the FTX customer deposits. When he later discovered in the fall of 2022 that Alameda owed $8 billion to FTX, no one was fired.
Mark Cohen, Bankman-Fried’s lead attorney, gave him a chance Tuesday morning to clarify some of his testimony regarding the relationship between FTX and Alameda.
SBF said that after he handed off the role of Alameda CEO, he stepped back from the firm significantly. As a majority owner, he said, he got updated financials “periodically,” and was involved in “many” of its venture investments, and became very involved in decisions around hedging, which he saw as an “existential risk for the company.”
He was not involved in day-to-day trading, he said.
“I was essentially uninvolved with those core operations.”
Asked about what would have happened if FTX and Alameda had never had any overlap, Bankman-Fried admitted the firms would have had “much better systems in place.”
“In retrospect, our oversight of that was very poor.”
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