Sam Bankman-Fried Is Going to Testify. Really!
Reading Time: 5 minutesWhy Is Sam Bankman-Fried Testifying? There Could Only Be One Reason., It’s not like much else seems to have worked., Sam Bankman-Fried is going to testify. There could only be one reason.
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One consistent theme of the trial of erstwhile crypto mogul Sam Bankman-Fried is that his defense kind of seems to be blowing it. At best, it has seemed, SBF’s lawyers have countered the steep charges facing their client by presenting their man as a victim misled by the high-profile witnesses who’ve taken the stand (much to the judge’s clear annoyance). Outside of a few successfully poked holes in witness testimony here and there—perhaps helping to draw a juror or two away from unanimous decisions on the seven charges—the consensus has been that things aren’t looking great for Sam Bankman-Fried.
We now have a keener sense of how SBF and his lawyers might approach the rest of this case, thanks to proceedings from this week that have set a tentative schedule for the final days of the trial (which resumes Thursday after taking a few days off). The big news is that SBF himself is confirmed as being set to testify in this trial, according to attorney Mark Cohen’s statement to Judge Lewis Kaplan on Wednesday morning: ‘We’re going to put on potentially three witnesses, and our client is also going to be testifying.’ The witnesses, who are mostly being brought on as experts on the defense’s behalf, will go first—and SBF will pick things up right after. So, depending how briskly things move, we could hear from him as soon as Thursday. And now that he seems to have secured some of the Adderall that he was deprived of in jail, as my colleague Heather Tal Murphy has documented, SBF may find himself in his element.
This is a pretty stunning development, not least because court watchers have been wondering for weeks whether Bankman-Fried will say his own piece at any point. The obvious cons: SBF talked a lot during the lengthy period in between his businesses’ collapse and the trial’s commencement, and this not only landed him in additional legal trouble on multiple occasions, but it came back to bite him during the current trial: A damning segment from his December Good Morning America interview was played in the courtroom last week. That TV segment, coupled with a bunch of his prior tweets on the financial state of FTX and its associated hedge fund Alameda Research, landed as an especially conspicuous exhibit of an SBF public statement that was directly contradicted by the witnesses for the prosecution, including once-loyal colleagues and friends like Gary Wang, Nishad Singh, Caroline Ellison, Adam Yedidia, and Can Sun. (In this case, it was Sun, a former FTX general counsel, telling SBF why a potential damage-control explanation for FTX’s failure wasn’t legally sound, only for Bankman-Fried to later offer that very explanation on national TV.) This is all to say: If those under-oath witnesses are indeed to be believed, SBF lied a lot both during and after his empire’s collapse. Can he be trusted under oath? Even if so, it’s not like personal testimony worked all that well in the trial of fellow Silicon Valley fraudster Elizabeth Holmes, as New York magazine’s Kevin T. Dugan points out.
The pros: It’s not like it can get much worse for Sam Bankman-Fried. The defense has rarely, if ever, directly countered any of the accusations from the prosecution—i.e., that SBF personally deputized his lieutenants to do various crimes like defrauding customers and investors. Rather, it’s tried to imply that the government indoctrinated its witnesses into weaving a particular narrative (under the explicit threat of imprisonment in case of perjury), and that SBF was actually running a successful business that only fell apart because his trusted underlings messed things up. It matters less how the public perceives that argument than how the jury does, narrowly focused as its members are supposed to be on just the courtroom workings. And the general outlook could improve depending on the defense’s choice of witnesses. According to the New York Times, one of them will be ‘an expert on the preservation of corporate records.’ Another will be Krystal Rolle, who according to the government ‘appears to have been a defense attorney for the defendant in the Bahamas.’ The remaining one may be the most substantive: Joseph M. Pimbley, a longtime markets analyst who currently works at a finance-litigation consulting firm known as PF2 Securities. As an expert witness, per a letter submitted Monday by Cohen and fellow defense attorney Christian Everdell, ‘Dr. Pimbley will testify to his opinion, based on data extracted from FTX’s database,’ that Alameda’s gigantic line of credit with FTX was not consistently so large—to the tune of $65 billion—as some witnesses have alleged, and that a significant amount of users did opt in to the FTX spot-margin trading program that granted SBF permission to use their deposits for particular purposes. It’s only after these three go on that SBF himself will take the stand.
Interestingly, per a letter the prosecution filed on Wednesday afternoon, SBF’s defense may well include some ‘Charts Created by the Defendant’ about FTX and Alameda—which the government wishes to preclude, because ‘none of these charts identify the sources on which they are based, and the Government has not been able to connect the numbers on these charts to any evidence in the case. ‘ This apparently is not a new issue, according to the Southern District of New York: ‘For weeks, since the defense first produced these charts prior to trial, the Government has repeatedly asked the defense to identify the sources of data for these charts, and the defense has declined to do so.’ Not exactly the most promising start.
So, depending on how all that goes, we could see a speedy end to this monumental case. Before the defense presents these witnesses, the prosecution has one more of its own—Marc Troiano, an FBI special agent who will speak to nature of the defendant’s now-deleted Signal chat. In the background, however, it’s still squabbling with SBF’s lawyers over the latter’s attempts to disregard certain bits of witness testimony on various grounds (namely, that some witness claims as to the serious charges are based more on feelings rather than facts). Kaplan has estimated that the four witnesses between the prosecution and the defense won’t take too long—but SBF himself may speak at length, per Cohen, meaning that cross-examination would take place Friday. Ideally, the judge would like for the case to not run past the first week of November, but considering how much SBF likes to talk, well, you never know.
Reference: https://slate.com/technology/2023/10/sam-bankman-fried-testify-defense-why.html
Ref: slate
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