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As the Sam Bankman-Fried trial reaches closing arguments, jurors must assess a spectacle of hubris


It was a high-stakes gamble with almost everything on the line, and in the end, it may have been the clearest demonstration of Sam Bankman-Fried’s greatest weakness: his hubris. The former crypto billionaire’s decision to testify in his defense was an incredibly risky move for a man facing seven counts for allegedly defrauding millions of global clients out of a staggering $8 billion, between other crimes.

But after all, this is the same man who attracted immense press for taking risks while building what appeared to be an innovative crypto exchange, FTX, valued at one point north of $65 billion and placing it in the same social circles as Bill Clinton, Tom Brady. and Katy Perry.

In this courtroom sketch, FTX founder Sam Bankman-Fried is questioned during his trial in Manhattan federal court on October 26.

Elizabeth Williams/AP

Bankman-Fried has pleaded not guilty, with his defense team arguing that he was simply an overworked entrepreneur who
too successful and delegated big tasks to a team that couldn’t handle them. But the MIT graduate turned Jane Street Capital intern could have let his lawyers do the talking, to avoid exposure to the government’s fierce and well-prepared cross-examination.

He did not do it. He built his own empire and believed he could organize his own defense.

Closing arguments on Wednesday are being closely watched by New York City jurors as they decide Bankman-Fried’s fate after more than four weeks of lengthy and often complicated testimony on the topic of financial technology – including that of three of SBF’s co-conspirators and former friends.

Caroline Elison, an executive and former romantic partner, Gary Wang and Nishad Singh pleaded guilty to their part in the scheme, which included using Alameda Research – a sister company of FTX – as a means to illegally spend and invest the deposits of FTX customers. All are cooperating with the prosecution to obtain more lenient sentences, but also risk spending decades behind bars.

Yet for all the complexity of cryptocurrencies, “margin trading,” and “front-running,” jurors only have to answer one simple question: Can you believe what Bankman-Fried says?

Caroline Ellison, former chief executive of Alameda Research, testified against Bankman-Fried.

Stephanie Keith/Bloomberg via Getty Images

When asked by the government’s lead prosecutor, Assistant U.S. Attorney Danielle Sassoon, if he really meant what he said to Congress as he argued for regulation of crypto exchanges, Bankman -Fried answered in the affirmative. But then he was asked to read out the government’s evidence regarding his texts to a reporter at the time – “just PR”, followed by “f*** regulators” and calling customers “stupid motherfuckers.”

When asked if he remembered telling reporters how he protected client deposits after FTX’s collapse, but before his indictment he didn’t remember, which was often followed by the exact audio from the podcast, split-screen video, or transcript of a news article confirming that the loquacious founder made these remarks.

At one point, he was asked to admit that FTX would not have seen such growth without its sister company Alameda Research, but he responded that he did not remember saying as much. Prosecutors then handed him the recently released book “Number Go Up” by investigative journalist Zeke Faux and asked him to turn to page 226 in which Bankman-Fried allegedly said Alameda Research “had more leeway.” on FTX than your typical client.

Even as the jury took into account that a federal prosecutor is expected to hammer the defendant, they also saw Southern District Court Judge Lewis Kaplan repeatedly interrupt Bankman’s testimony- Fried to get him to answer questions clearly, at one point stating in a calm but stern voice, “Look, just answer the question.”

CBS legal analyst Rikki Klieman, a former defense attorney, said: “Jurors follow their directions, whether explicit or implied, from a judge and (Kaplan) was pretty harsh as well with the lawyers of Sam Bankman-Fried; the jury is not missing anything. that.”

At the very least, this jury, which includes a nurse, retirees and a special education teacher, was able to dramatically see how a 31-year-old Silicon Valley genius calculated enormous risks and faced potential peril. They will soon decide if this was all criminal.

There were numerous times when Bankman-Fried appeared to buckle under pressure when asked by the prosecution how he approached risk/benefit calculations. On Tuesday, at one point, he was asked several times and in various ways: “Was it your practice to maximize your money earnings even if there was a risk of bankruptcy?”

Bankman-Fried finally responded: “With certain business decisions, yes. »


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