If Sam Bankman-Fried wanted to go out with a bang, he accomplished the opposite, closing out his federal fraud trial with more pummeling from the prosecution and resting his defense with no further evidence or witnesses.
Assistant U.S. Attorney Daniel Sassoon repeatedly whaled on the former FTX CEO as he tried to claim ignorance about the management and financial condition of the crypto exchange and his hedge fund, Alameda Research. He was combative and almost petulant while responding evasively to answers in his third day on the witness stand.
Sassoon hit Bankman-Fried especially hard on his assertion that he knew little about an apparent $8 billion hole in Alameda’s balance sheet that was discovered around the summer of 2022. The disgraced whiz kid said he instructed some of his executives to handle the problem—a bug in FTX's code—but didn’t learn the details of it himself.
“It’s your testimony that as CEO, some unknown people spent $8 billion without your knowledge?” Sassoon asked. Later, she questioned why he had not followed up on the issue with his employees.
“I was told they were busy and I should stop asking questions,” he replied.
“Did you fire anyone?” Sassoon inquired.
“No,” he said, later adding: “For better or for worse… I wasn’t particularly interested in trying to dole out blame.”
The holes in Alameda’s balance sheet are at the center of the trial, which focuses on FTX’s decision to loan billions in customer assets to the hedge fund, which in turn allegedly used the money pay off liabilities and make venture investments. Bankman-Fried faces seven charges including wire fraud and securities fraud, and faces decades in prison if convicted.
Sassoon pressed Bankman-Fried on whether he explicitly instructed Alameda employees not to spend FTX customer deposits.
“I didn’t. I deeply regret not,” he admitted.
Asked whether he had given any instructions about keeping those deposits “safe” or keeping them segregated from other company funds, he replied: “I don’t recall giving any directions.”
Sassoon spent significant time on FTX’s relationship with the Bahamian government, painting a picture of a company that cozied up to its host country in hopes of securing favoritism. She noted that Bankman-Fried offered to meet with the prime minister’s son about his career, and that FTX gave the prime minister courtside seats at the Miami Heat arena bearing the firm’s name—a fact Bankman-Fried said he did not remember until Sassoon pulled up contemporaneous text messages in which he confirmed as much to employees.
Asked if he invited the Bahamian prime minister, President Bill Clinton, and British Prime Minister Tony Blair to a dinner, Bankman-Fried said he remembered the meeting but didn’t “remember if there was food.” Later, asked about who spent $8 billion dollars in FTX customer money, Bankman-Fried objected to the word “spend,” saying he preferred the word “used.”
“When you say ‘used,’ you mean used by spending it,” Sassoon clarified. Bankman-Fried conceded this was essentially true.
Earlier in the trial, several of Bankman-Fried’s former lieutenants gave damning testimony alleging that Bankman-Fried was not only knowledgeable about the financial misconduct but had directed it. His ex-girlfriend Caroline Ellison, who ran Alameda, said she prepared multiple versions of balance sheets in an effort to mislead investors, while former head of engineering Nishad Singh said they had collectively committed “heinous crimes.”
As Tuesday’s testimony ended, Cohen stood from his chair with a last-minute hail mary: “We renew our motion for a judgment of acquittal,” he told the judge.
The motion was immediately denied.