<-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2c900000″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Sam Bankman-Fried-bsp-person> will take the stand to defend his actions in the lead-up to the collapse of his digital-asset empire, after taking a beating from former colleagues who described him as the mastermind of a years-long scheme to defraud FTX customers and investors.
Bankman-Friedâs lawyers said on a conference call with the judge Wednesday that their client will testify at his fraud trial after the prosecution finishes its case. The 31-year-old could take the stand, barring a last-minute change, as soon as Thursday afternoon.
The once respected crypto mogul is facing decades in prison on charges that he directed the transfer of FTX customer money into Alameda Research, an affiliated hedge fund, for risky investments, political donations and expensive real estate before both companies spiraled into bankruptcy last year.
While defendants often avoid testifying â a move that can easily cause more harm than good â itâs one of Bankman-Friedâs final defense options after facing weeks of damaging testimony from former members of his inner circle.
Three of Bankman-Friedâs closest confidantes, Alameda Chief Executive Officer <-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2d020000″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Caroline Ellison-bsp-person>, FTXâs former head of engineering <-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2d020001″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Nishad Singh-bsp-person>, and <-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2d020002″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Gary Wang-bsp-person>, a co-founder of the crypto exchange, pleaded guilty to fraud and cooperated with prosecutors. On the stand, all three pointed at Bankman-Fried as the one calling the shots when customer funds were misused.
Prosecutors said on the call that they will have one more witness Thursday morning, an FBI agent, who will summarize chats that were automatically deleted.
Lawyers for Bankman-Fried said they also anticipate calling three witnesses before their client, including <-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2d370000″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Joseph Pimbley-bsp-person>, a financial expert, who will testify about Alamedaâs line of credit and FTXâs spot margin program.
Closing arguments are likely to take place early next week, with the jury to begin deliberations soon afterward.
Bankman-Friedâs lawyers had signaled it was possible he could testify. They complained to Judge
Read More: <-bsp-bb-link state=”{“bbDocId”:”S2MLLMT0AFB4″,”_id”:”0000018b-677f-d53f-a1eb-7f7f2d380001″,”_type”:”0000016b-944a-dc2b-ab6b-d57ba1cc0000″}”>SBF Lawyers Say FTX Co-Founder May Need Adderall to Testify -bsp-bb-link>
Bankman-Friedâs testimony will be the first time the public will hear him speak at length in months. The FTX co-founder agreed to a gag order in July, largely preventing him from talking to the press about the case. A month later he was sent to jail after his bail was revoked over accusations he tried to tamper with witnesses.
Prior to that, Bankman-Fried was eager to share his version of events. In the month between his companyâs collapse and his arrest in the Bahamas, he went on a public speaking tour to try to clear his name, saying he may have made some mistakes but never âknowinglyâ misused customer funds or tried to commit a crime. The day after he was arrested, he was supposed to testify before Congress. A leaked copy of his opening remarks showed he planned to admit that he âf***ed upâ while still casting much of the blame for his firmâs failure elsewhere.
Read more: <-bsp-bb-link state=”{“bbDocId”:”S2DEKWDWLU68″,”_id”:”0000018b-677f-d53f-a1eb-7f7f2d390000″,”_type”:”0000016b-944a-dc2b-ab6b-d57ba1cc0000″}”>Caroline Ellison Says âSam Was the Oneâ Who Caused FTX Collapse-bsp-bb-link>
The testimony from his former colleagues was difficult, likely leaving Bankman-Fried little choice but to take the stand.
Ellison testified that Bankman-Fried directed her to commit crimes at Alameda, including falsifying the hedge fundâs balance sheets to conceal that it was taking in large sums of money from FTX customers.
Wang also testified that Bankman-Fried was the one in charge, claiming he asked for the creation of a backdoor between Alameda and FTX to facilitate the transfer of customer funds.
The allegations were supported by Singh, who also spoke to his former boss and friendâs spending on lavish real estate and celebrity endorsements, saying it âreeked of excess and flashiness.â
Bankman-Friedâs team has had small wins here and there â including a moment where Singh admitted to having the ânicest roomâ in a $30 million penthouse shared by FTX and Alameda executives, despite saying he was uncomfortable with Bankman-Fried making the âsuper ostentatiousâ purchase. But, on a whole, the defense has largely been unable to dent the former insidersâ version of events.
(Updates with details from conference call in fifth paragraph)
–With assistance from <-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2d3b0000″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Yueqi Yang-bsp-person> and
To contact the reporters on this story:
<-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2d3f0001″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Bob Van Voris-bsp-person> in federal court in Manhattan at rvanvoris@bloomberg.net
To contact the editors responsible for this story:
<-bsp-person state=”{“_id”:”0000018b-677f-d53f-a1eb-7f7f2d410000″,”_type”:”00000160-6f41-dae1-adf0-6ff519590003″}”>Misyrlena Egkolfopoulou-bsp-person> at megkolfopoul@bloomberg.net
Anthony Aarons
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