Thu. Feb 22nd, 2024

The only authorized recommendation is to say nothing in any respect. Sam Bankman-Fried, founding father of crypto alternate FTX, who not too long ago took to the stand at his personal fraud trial, isn’t excellent at that. However, probably, it received’t be his testimony that seals his destiny. Will probably be the monthlong media tour he launched into late final yr, after FTX fell.

Bankman-Fried is standing trial on seven counts of fraud in reference to the collapse of FTX. The alternate fell out of business after customers discovered they may now not withdraw their funds, price billions of {dollars} in combination. The cash was lacking, the US authorities claims, as a result of Bankman-Fried had funneled it right into a sibling firm, Alameda Analysis, and used it for dangerous trades, debt repayments, private loans, political donations, enterprise bets, and varied different functions.

Bankman-Fried recollects occasions otherwise. On the stand, below questioning by his personal authorized counsel, he painted himself as a well-intentioned however overworked businessperson. He conceded that expensive errors have been made with respect to danger administration, however claimed by no means to have defrauded anybody. For each probably incriminating facet of the connection between FTX and Alameda—the sharing of financial institution accounts, particular buying and selling privileges, and multibillion-dollar loans—there was a logical enterprise rationalization. The association was completely above board, he implied.

This line of argument, says Daniel Richman, a former prosecutor and professor at Columbia Legislation Faculty, was the “most viable path to take” for the protection, whose choices had been “considerably restricted” by the power of cooperating witness testimony. However it was a Hail Mary nonetheless, in no small half as a result of Bankman-Fried, in his parade of interviews previous to his arrest, had given the prosecution size upon size of rope with which to hold him.

The choice for Bankman-Fried to take the stand was a high-risk play with vital potential draw back. Though it gave him the prospect to relay his personal model of occasions, it uncovered him to questioning by the prosecution. If he have been to perjure himself and later be convicted, he risked a harsher sentence too. However to mount the “good religion” protection, says Paul Tuchmann, a former prosecutor and companion at regulation agency Wiggin and Dana, testifying was the one accessible possibility. “It’s very arduous to make that protection with out calling the shopper to the stand,” he says, when “the individuals closest to him testified the other.”

Bankman-Fried’s attorneys will likely be happy, says Tuchmann, together with his efficiency in direct examination. The purpose was to “current another narrative of occasions,” he says, and provides Bankman-Fried the chance to attraction to the sympathies of the jury, one thing the protection was in a position to obtain.

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