Nobody Cares about Sam Bankman-Fried and FTX

[Free]

I'm not sure taking the stand is the best strategy for him.

Sam Bankman-Fried to testify in hopes of avoiding life in prison

After lots of damaging testimony, former FTX boss will take the stand.

arstechnica.com

 

[Innula Zenovka]

I'm not sure taking the stand is the best strategy for him.

Sam Bankman-Fried to testify in hopes of avoiding life in prison

After lots of damaging testimony, former FTX boss will take the stand.

arstechnica.com

In England and Wales, the defence can ask the judge to rule, after the prosecution closes its case, that no reasonable jury, properly directed, could convict on the basis of the evidence before the court, so the case should be dismissed without the defence having to produce any evidence in rebuttal.

Assuming US federal criminal procedure is similar, if the judge rules there is a case to answer, then I don't think Bankman-Fried has much choice in the matter. I know he doesn't have to, and I know the prosecution aren't allowed to comment on his failure to give evidence on his own behalf (they could here, with the judge's agreement), but without his side of the story, it's difficult to see, on the basis of what the jury have been told so far and assuming they find it credible, how they could acquit him.

 

[Noodles]

The testemony:

 

[Veritable Quandry]

At this point, he is losing the case badly. While it is a risk and he is probably a nightmare to coach for cross-examination, they probably have concluded that he can't make it worse but he could blunt some of the damage.

 

[Free]

Sounds like things are going well?

Sam Bankman-Fried testifies, says he “skimmed over” FTX terms of service

SBF said he thought loans were legal but didn't fully read FTX terms of service.

arstechnica.com

Today's testimony was unusual because US District Judge Lewis Kaplan sent the jury home for the day to conduct a hearing on whether certain parts of his testimony are admissible. "That means Bankman-Fried will give some of his testimony to the judge without the jury present. The judge will then decide whether Bankman-Fried is allowed to say the same testimony in front of a jury," The Wall Street Journal wrote in its live coverage. The trial is not being streamed via audio or video.

Some of the alleged fraud relates to how Alameda borrowed money from FTX. In testimony today, "Bankman-Fried said he believed that under FTX's terms of service, sister firm Alameda was allowed in many circumstances to borrow funds from the exchange," the WSJ wrote. Bankman-Fried reportedly said the terms of service were written by FTX lawyers and that he only "skimmed" certain parts.

"I read parts in depth. Parts I skimmed over," Bankman-Fried reportedly said after Kaplan asked if he read the entire terms of service document.

Sassoon asked Bankman-Fried if he had "any conversations with lawyers about Alameda spending customer money that was deposited into FTX bank accounts," according to Bloomberg's live coverage. "I don't recall any conversations that were contemporaneous and phrased that way," Bankman-Fried answered.

There's also discussion of the loans FTX and Bankman-Fried himself took out from Alameda. He wracked up over 1 billion.

More on Thursday's tesimony from The Verge. They don't think it went well at all:

Sam Bankman-Fried is going to talk himself right into jail

Somehow, the least suspicious parts of his defense are the 288 auto-deleting Signal conversations.

www.theverge.com

 

[Veritable Quandry]

It does sound like his testimony is aimed at intent. That he didn't mean to bankrupt the company and he thought his actions were legal. That would undermine charges that he willfully violated the law, but not that he did violate the law, reducing the severity of the offenses.

 

[Essence Lumin]

The defense questioned him. The Verge gives all the details. Cross examination should be interesting when it happens. Monday? I'm not sure.

The jury finally hears from Sam Bankman-Fried

This guy really loves the sound of his own voice.

www.theverge.com

 

[Free]

Sam Bankman-Fried repeatedly told to “stop talking” during rambling testimony

FTX co-founder scolded for making up his own definition of market manipulation.

arstechnica.com

On Friday, Sam Bankman-Fried began his first day testifying before a jury with a loss. The FTX co-founder had intended to explain exactly how much he relied on lawyers to steer his decision-making amid the cryptocurrency exchange's rise and collapse, but US District Judge Lewis Kaplan ruled that particular part of his proposed testimony could not be heard by the jury, The Wall Street Journal reported.

Bankman-Fried had testified on Thursday that his in-house legal team oversaw paperwork for "hundreds of millions of dollars in personal loans to himself and other founders of the platform," CNBC reported. He told the court that having his legal team's blessing was something that he "took comfort in."

“That evidence would in my judgment be confusing and prejudicial,” Kaplan said, dealing what many outlets considered a serious blow to Bankman-Fried's defense.

Legal experts have said that Bankman-Fried's testimony could be a disaster for his defense, unintentionally convincing the jury that he is the criminal mastermind and fraudster he insists that he is not. It's clear from today's testimony that he intends to counter that narrative by portraying himself as someone who made mistakes while acting in good faith. Despite analysts' predictions that Bankman-Fried might dig his own grave, the WSJ reported that on Friday, Bankman-Fried appeared "confident" in building his defense before the jury.

However, not everyone was as confident in the answers that Bankman-Fried gave on the stand, and it seems likely that the jury may have occasionally grown frustrated with Bankman-Fried during his time on the stand. According to The Post, the first three hours of Bankman-Fried's testimony contained "no revelations," and the judge repeatedly grew impatient whenever Bankman-Fried gave "long, rambling answers."

On "multiple occasions," Kaplan asked Bankman-Fried "to stop talking" and eventually "admonished Bankman-Fried for trying to provide his own definition of market manipulation."

"You will take what I say manipulation means," Kaplan instructed Bankman-Fried and the jury.

 

[Innula Zenovka]

Let's see how he fares under cross examination. From what I read of his performance during the voir-dire hearing on Thursday, things don't look good for him. Some of his answers then left him wide open to very damaging lines of questioning by the prosecution.

 

[Kamilah Hauptmann]

"Jail is not that bad" SBF & Martin Shkreli 😂

Martin Shkreli, Sam Bankman-Fried, Do Kwon, Cobie, in an incredible edit lmao 2 week free trial w/ my sponsor Aura: https://aura.com/tiffany☝HIGHLY RECOMMEND...

m.youtube.com

 

[Free]

"Jail is not that bad" SBF & Martin Shkreli 😂

Martin Shkreli, Sam Bankman-Fried, Do Kwon, Cobie, in an incredible edit lmao 2 week free trial w/ my sponsor Aura: https://aura.com/tiffany☝HIGHLY RECOMMEND...

m.youtube.com

Then maybe we can make it a permanent arrangement.

 

[Free]

 

[Noodles]

It does sound like his testimony is aimed at intent. That he didn't mean to bankrupt the company and he thought his actions were legal. That would undermine charges that he willfully violated the law, but not that he did violate the law, reducing the severity of the offenses.

I mean, I hate playing Devil's advocate here, but isn't this basically what everybrich asshole does?

Isn't this badically how Musk is "worth" 200 whatever billion dollars? Because he is basically spending and borrowing against Tesla's (etc) money.

 

[Veritable Quandry]

While Musk is an asshole, he follows general accounting procedures. He owns shares of stock in Tesla which he can sell or use as collateral for loans. There is for the most part a separation between Musk's finances and Tesla's finances.*

With SBF and his colleagues, they were using company money to buy property that they lived in and were loaning themselves money from the company. There was no clear separation between their money and company finances. It is also very different because their company was holding deposits. That money should not have even been company money. Financial firms usually have strick controls over what happens with deposits.

*There is an investigation of Tesla to determine if they have been developing a property to serve as a home for Musk. That would be a violation of the law if company funds are being spent for his personal use and not reported as compensation for tax purposes.

 

[Free]

Sam Bankman-Fried didn’t ask where the $8 billion went

“So it’s your testimony that your supervisees told you to stop asking questions?”

www.theverge.com

Let’s say I am the owner of a hedge fund, and one fine June day, my employees come to me and say, “Hey, Liz, we have an accounting problem. We are missing several billion dollars.” How would I react?

I have been wondering this since Danielle Sassoon walked Sam Bankman-Fried through his reaction to the FTX software bug fixed by Adam Yedidia. In my case, there would probably be shouting? Like, a lot of shouting. I would also probably have my assistant figure out which law enforcement agency to call immediately. Misplacing $900 million is a five-alarm fire even for Citibank; misplacing several billion is kicking over a lantern in Chicago in 1871.

Obviously, this is not how Bankman-Fried reacted to the software bug that overestimated the amount Alameda owed to FTX by about $8 billion. Nor is it how he reacted to finding out that even after fixing the bug, Alameda still owed FTX about $8 billion. Instead, Bankman-Fried directed alleged co-conspirator Caroline Ellison to repay third-party loans and went on making investments.

 

[Innula Zenovka]

 

[Free]

 

[Innula Zenovka]

That didn't take long.

 

[Veritable Quandry]

Took 4 1/2 hours to deliberate on all charges.

 

[Free]

Took 4 1/2 hours to deliberate on all charges.

2 of them spent ordering and then eating lunch (I assume).