Sam Bankman-Fried co-founded FTX in 2019 and is its CEO. Photo FTX
Sam Bankman-Fried has become his own worst enemy. The disgraced founder of the now bankrupt FTX cryptocurrency exchange, who is now on trial in a federal court on charges of fraud that could see him spend the rest of his life in jail, took the risky step of testifying on his own behalf in court this week.
The testimony of Sam Bankman-Fried will likely be used as a case study in law schools everywhere for years to come on why a criminal defendant should not testify on his own behalf and just keep his mouth shut.
According to all reports, Sam Bankman-Fried’s performance on the stand has been awful. He answers questions from the prosecutor by saying things like yep” or “sounds plausible,” and gave evasive answers to other questions about the consequences of his actions by saying “I did not at that time think the odds of that were significant.”
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And Sam Bankman-Fried also, for some reason, thinks that it is appropriate to answer questions while on the witness stand in a federal courtroom by saying, “I’m not sure” many times.
One of the main issues of the case against him is that Sam Bankman-Fried’s separate investment firm Alameda Research used FTX like its own personal piggy bank, taking FTX clients’ funds for its own purposes without their permission. This is one reason the firm could not pay back its clients when the crypto market crashed.
The prosecutor needs to prove to the jury that Bankman-Fried was aware of all of this.
So US Assistant Attorney Danielle Sassoon asked him in court, “Do you deny that Alameda could withdraw billions of dollars from the FTX exchange using a line of credit without being subject to the auto liquidation protocol?”
Unable to avoid answering direct questions, Sam Bankman-Fried still tried to do so saying, “That might be right.”
But the prosecutor then said, “You don’t deny it?” To this, he could only reply, “I don’t deny it, no.”
Sam Bankman-Fried stands accused of seven counts of fraud, embezzlement of billions of dollars and conspiracy. If convicted on all counts, he could be sentenced to as much as 115 years in jail. The charges came after his FTX cryptocurrency exchange company went bust a few weeks ago. The big question over the fall of FTX is “what happened to all of the money that people left with the company?” FTX was a crypto bank, so to speak, a place where people could park their virtual assets. But unlike with banks, there is no regulation over the handling of cryptos and FTX is said to have moved people’s cryptos around, basically that the company spent their money.
Based in the Bahamas, FTX was a cryptocurrency exchange that said it was built by traders, for traders. FTX offers industry-first derivatives, options, volatility products and leveraged tokens. FTX had more than one million traders using its services when it failed.
