Sam Bankman Fried testifies earlier than a choose, with no jury, in a fraud trial

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Sam Bankman-Fried, founding father of the now-bankrupt FTX cryptocurrency change, testified within the fraud trial on Thursday with out the jury current in order that the choose overseeing the case may first resolve which elements of his testimony had been admissible.

US District Choose Lewis Kaplan’s choice to listen to the 31-year-old former billionaire outdoors the presence of the jury got here after prosecutors completed presenting their case accusing Bankman-Fried of stealing billions of {dollars} from shoppers, and the protection introduced its first two witnesses.

The choose launched the jurors for the remainder of the day after the lunch break and ordered them to return Friday morning. The bizarre transfer got here after Bankman-Fried’s legal professionals stated they deliberate to hunt testimony about FTX’s attorneys’ involvement in key firm choices, equivalent to retaining paperwork and crafting loans to executives that prosecutors stated was one of many methods Bankman-Fried stole cash.

Protection attorneys stated their involvement confirmed Bankman-Fried was appearing in good religion, however Kaplan stated he wanted extra info earlier than deciding whether or not testimony may very well be introduced to jurors.

Bankman-Fried started by testifying about FTX’s use of encrypted messaging platforms like Sign and Slack. He stated he believes the usage of such platforms is in line with FTX’s insurance policies, which had been set by legal professionals. Prosecutors argued that Bankman-Fried inspired workers to make use of such platforms to cowl their tracks.

Bankman-Fried has pleaded not responsible to 2 counts of fraud and 5 counts of conspiracy. If convicted, he may face a long time in jail. Prosecutors stated he used the embezzled funds to assist his cryptocurrency-focused hedge fund, Alameda Analysis, make investments in speculative tasks and donate greater than $100 million to U.S. political campaigns.

The prosecution stays the case

The prosecution resumed its case after presenting 12 days of testimony in federal courtroom in Manhattan, the place former associates near FTX instructed the jury that Bankman-Fried directed them to funnel shoppers’ cash into its hedge fund and misinform traders and lenders. His dangerous choice to testify offers prosecutors the chance to query him on allegations he instructed his colleagues he dedicated crimes.

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Three of his former colleagues, who pleaded responsible and agreed to cooperate with prosecutors, tailor-made their testimony to implicate Bankman-Fried in hopes of getting diminished sentences, his legal professionals stated.

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Protection lawyer Mark Cohen stated Bankman-Fried’s direct testimony may final practically 5 hours, earlier than prosecutors have an opportunity to query him.

After the prosecution rested its case, the choose rejected the protection’s request to acquit Bankman-Fried earlier than referring the case to the jury. Cohen stated prosecutors didn’t current “viable authorized theories” about Web fraud, one thing Legal professional Basic Nicholas Ross disputed.

The prosecution’s closing witness, FBI agent Mark Troiano, testified about Bankman-Fried’s use of the encrypted messaging app Sign when the trial resumed Thursday morning after a week-long hiatus.

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Sign teams Bankman-Fried was in with colleagues had been typically set to routinely delete messages, Troiano stated, as jurors noticed screenshots from a telephone belonging to Carolyn Ellison, the previous CEO of the Alameda Analysis hedge fund of Bankman-Fried and his companions. off girlfriend.

Carolyn Ellison appears before testifying in the trial of her former boss, Sam Bankman, Fred H
A lot of the case towards Bankman-Fried was constructed on the testimony of his former workers, together with Carolyn Ellison, who appeared as she left courtroom on October 11. (Stephanie Keith/Bloomberg)

Bankman-Fried maintained that though he made errors in working FTX, he by no means meant to steal the funds.

Authorized consultants stated that Bankman-Fried didn’t have a lot to lose if he went towards standard knowledge and testified, in gentle of the weeks of testimony issued towards him by insiders that painted an unfavorable image of his character.

Bankman-Fried took the stand after the protection introduced its first two witnesses: Crystal Rolle, Bankman-Fried’s lawyer within the Bahamas; and database knowledgeable Joseph Pimbley.

Rolle, the protection’s first witness, testified that the day after FTX declared chapter on November 11, 2022, authorities within the Bahamas — the place FTX is headquartered — directed Bankman-Fried to show over remaining property to regulators within the Caribbean nation.

The protection may argue that Rule’s account undermines prosecution testimony supplied by Gary Wang, FTX’s former chief expertise officer, that Bankman-Fried instructed him he moved property to the Bahamas as a result of “they appeared extra more likely to let him stay in charge of the corporate, than… United State”

Pimbley, the second protection witness, testified that the majority FTX clients have some sort of account that enables their cash to be loaned to different customers. Bankman-Fried’s attorneys may argue that reveals that Alameda’s use of FTX shoppers’ funds was not improper.

That would come with any testimony about FTX’s attorneys’ involvement in structuring loans from Alameda to FTX executives, which prosecutors stated was the first approach the defendant and others obtained cash from unwitting shoppers.

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