FTX founder Sam Bankman-Fried leaves court, in New York, on July 26.Mary Altaffer/The Associated Press
Sam Bankman-Fried plans to testify in his own defense at his criminal fraud trial, after his closest associates blamed the former billionaire for the collapse last November of his now-bankrupt FTX cryptocurrency exchange.
In a Wednesday telephone conference with U.S. District Judge Lewis Kaplan, who oversees the case in Manhattan federal court, Bankman-Fried’s lawyer Mark Cohen said the defense planned to call three other witnesses to testify briefly after prosecutors finish presenting their case.
“And our client is also going to be testifying,” Cohen said.
Taking the stand could allow Bankman-Fried, who has pleaded not guilty to fraud and conspiracy charges, to tell jurors face-to-face that while he made mistakes running FTX, he never intended to steal customers’ money.
Testifying carries significant risks, and will likely subject Bankman-Fried, 31, to a tough cross-examination by prosecutors armed with documents, messages and testimony from cooperating witnesses they can use to attack his credibility.
Still, Bankman-Fried’s penchant for risk and willingness to publicly discuss the case following his arrest may reflect his confidence he can convince at least one of the 12 jurors that he did not intend to commit fraud, legal experts said.
Three former members of Bankman-Fried’s inner circle, who pleaded guilty and agreed to cooperate with prosecutors, testified that he directed them to commit crimes, and was aware his hedge fund Alameda Research had taken billions of dollars from FTX customers without their consent.
Prosecutors have said Bankman-Fried used that money to prop up Alameda, make speculative investments, and donate more than $100-million to U.S. political candidates and campaigns.
In the three weeks since the trial began, they have tried to prove that Bankman-Fried intended to defraud his customers, Alameda lenders and FTX equity investors.
Defense lawyers have said some activities that prosecutors said amounted to theft of customer funds, such as granting Alameda special privileges to trade on FTX, were reasonable business decisions for Bankman-Fried to make at the time.
They have also sought to blame FTX’s collapse on Bankman-Fried’s inner circle, including his former girlfriend and Alameda chief executive Caroline Ellison, saying they tailored their testimony in the hope of receiving lenient sentences.
On the witness stand, Bankman-Fried may have to address testimony that he had spoken with former colleagues about Alameda’s huge debts to FTX customers.
He may also have to explain text messages previously shown to jurors, indicating he knew about the funds shortfall when he posted on Twitter that FTX was “fine” just days before the exchange’s demise, even as withdrawals were mounting.
Cohen said the other defense witnesses could include a database expert, a records custodian, and Christina Rolle, the chief securities regulator in the Bahamas, where FTX had been based.
Prosecutors expect to rest their case on Thursday morning. Cohen said the defense could wrap up its case on Friday, depending on how long cross-examination by prosecutors lasts. Closing arguments could begin as soon as Monday.