Bankman-Fried didn’t recall
The Case of Sassoon: What Has Bankman-Fried Done About Crypto Exchanges and the Misfortune of Mobile Coin?
Sassoon moved on to a series of questions about whether Bankman-Fried recalled extremely specific things. Did he recall saying that FTX had reformed how crypto exchanges worked? That he had built a responsible system? Is the FTX a good exchange? That FTX was providing clarity and transparency to the crypto system?
Bankman- Fried said a spoiled child complained he didn’t get the big scoop of ice cream at his birthday party. He didn’t want to answer the prosecutor’s questions, or his lawyer’s questions — he wanted to answer his own questions, which he liked better. He often replied to yes-or-no questions with nonsense.
The testimony of Mr. Bankman-Fried was the most anticipated part of the trial and shone a light on the risks involved in the industry. Once the face of crypto’s efforts to woo the public, Mr. Bankman-Fried is now widely compared to some of the most notorious fraudsters in recent history, including Elizabeth Holmes, the founder of the failed blood-testing start-up Theranos.
Then there’s the massive loss from MobileCoin that Alameda took on while under Bankman-Fried’s official leadership. None of the other backstop liquidity providers wanted the position, Sassoon asked, because it was a “loser” — right? Sassoon pointed out the massive loss caused by Bankman-Fried. FTX would have booked the loss had Alameda not taken it on. FTX didn’t have to give its books to investors. It was easier to get VC funds after scapegoating Alameda.
But Sasson didn’t leave it there. Someone had made a trade using several loopholes on FTX. Did Bankman- Fried inform the investors about this exploit? He did not. Did he tell customers? Nope.
The meat of the cross was next on the agenda for Sassoon. Multiple statements, from multiple interviews, featured Bankman-Fried saying that Alameda had some special privileges — which was, of course, something Bankman-Fried had also denied to customers.
On the Fall of the FTX, is Fine, Assets are Fine, and Why Did Sassoon Tell Kelsey Piper?
In a way the fall of FTX was incredibly childish, as a nerd posse ran away with a bunch of other people’s money.
Sassoon immediately followed this with direct messages Bankman-Fried had sent to Kelsey Piper, in which he said this was all just public relations, and “fuck regulators.”
Still, he hadn’t made any of those statements under legal oath, had he? Well… that remained true until we reached his Congressional testimony. Testimony he submitted to Congress stated that the trading platforms had to maintain enough liquid assets for customers to withdraw. Proper bookkeeping should be done to prevent misuse of customer assets. Ensuring appropriate management of risks. Avoiding conflicts of interest.
So for the stories Bankman-Fried wanted to tell, we had to rely on… Bankman-Fried. I still don’t understand how Bankman-Fried could say he’s a smarter trader than his ex-girlfriend, despite the fact that he used to be a trader. The actual evidence suggests Ellison is both a better trader and much savvier than Bankman-Fried. She modeled out a risk scenario that matched almost exactly what happened at FTX, for instance, to try to keep him from sinking $2 billion in venture investing. She is also cooperating with the government. If I have to bet on one of them, I will bet long on Ellison.
I had been waiting for the cross examination and we got it. And while Bankman-Fried’s direct testimony was short on contemporaneous evidence, the cross was not. Sassoon was a matador in kitten heels, baiting Bankman-Fried before driving her sword through his shoulders.
Bankman-Fried’s other major task was figuring out how to explain away the infamous “FTX is fine. Assets are fine.” You can say it through a follow-up statement. According to Bankman-Fried, he really believed that at the time. He said that Alameda was still solvent on November 8th. Almost all of the other events occurred exactly as others had described them, except that Bankman-Fried sounded more heroic in this telling, if only because he was not doing any crimes this time.
I found myself reflecting on how smart the average person is after Danielle Sassoon asked a brutal line of questioning during SamBankman-Fried’s cross examination. Maybe they don’t know calculus. Maybe they will never read it. Maybe they can’t code. They know what to look for when they see bullshit.
What little Bankman-Fried had to say during his first testimonies of the November 7th shooting: A tale of two people, one story or another
If Bankman-Fried and others have moved into the Clintonian territory, it depends on how you define trading. The stupid will see through it if you make whatever you like about it.
At various points during Sam Bankman-Fried’s cross examination, I saw jurors shake their heads, frown so hard their lips disappeared, and make prolonged eye contact with each other. Personally, I now have a Pavlovian fear response to the phrase “Is it your testimony that…”
The day didn’t start as a disaster. In fact, Bankman-Fried’s direct testimony was the strongest he’d given so far: clear, coherent, believable. On his home territory of direct examination rather than cross-examining the prosecutors’ witnesses, defense lawyer Mark Cohen improved his ability to order a simple chronological narrative, even if he once instructed us to move forward in time from November 7th to… November 7th.
But Bankman-Fried’s recounting of events was supported by very little other evidence. Text messages, documents and code snippets all corroborate Gary Wang’s version of events. What little Bankman-Fried did have was very thin.
