What Bankman-Fried said in public when he ran away with a bunch of other people’s money? The meat of the cross
There was more. I wondered if Bankman-Fried referred to FTX as safe in public statements. He couldn’t recall. Did he remember tweeting that the acceptable number of issues when it comes to a client’s money is zero? He was not able to recall. Had he told the truth to customers in a way that violated sacred rules of conduct? He couldn’t remember. He supported regulation only if it protected consumers. He couldn’t recall.
The US government’s lawyers kept pointing to contradictions between what Bankman- Fried said in public and what he did in private as they continued to build their case that he orchestrated a large financial fraud.
The area in front of the courthouse in Lower Manhattan was crowded with a mix of people waiting for Bankman-Fried’s testimony to start on Friday. The first reporter showed up just after midnight to secure a seat in the courtroom.
Behind all the finance sheets and code bases, the fall of FTX was a silly one: a nerd posse running away with a bunch of other people’s money. I understand Bankman-Fried went to MIT and majored in physics and was a successful trader on Wall Street. But sitting on the stand, he resembled nothing so much as a child who’s broken a family heirloom and is insisting his invisible friend did it.
But it was not left there by Sasson. There were several loopholes that someone exploited in order to make the trade. Is Bankman-Fried telling investors about this exploit? He didn’t. Did he say anything to customers? Nope.
Once that was accomplished, Sassoon moved on to the meat of the cross. A number of statements featured Bankman-Fried saying that Alameda had some special privileges, similar to what Bankman-Fried had denied customers.
The Fall of FTX: When Sam Bankman–Fried Didn’t Wanna Run Away with a Bunch of Other Peoples Money
The fall of FTX was very childish, as a nerd posse ran away with a bunch of other peoples money in the dumbEST and simplest way possible.
He immediately followed this with direct messages from Bankman-Fried, who said that this was all for public relations.
He had not made any of those statements under oath. Well… that remained true until we reached his Congressional testimony. According to testimony he submitted to Congress, trading platforms have obligations to maintain enough liquid assets to allow customers to withdraw. Appropriate bookkeeping should be ensured by platforms to prevent misuse of customer assets. Figuring out the management of risks. Avoiding conflicts of interest.
Bankman-Fried gave instructions on Japanese government bonds. Hedging is a form of trading, and Bankman-Fried had just testified about giving Ellison directions on hedging. Bankman-Fried stated that he hadn’t been for years at Alameda and that he wasn’t involved in the trading. I was not involved in the project because of possible conflicts of interest. Bankman-Fried told the Financial Times that he didn’t want to trade.
The cross examination was what I had been waiting for. The cross was not short on evidence but it was long on the direct testimony. Sassoon was a matador in kitten heels, baiting Bankman-Fried before driving her sword through his shoulders.
Bankman-Fried had to figure out how to explain what FTX really is. Assets are okay. Leave a reply. Bankman-Fried believed that at the time. On November 8th, Alameda was still solvent, he said. Bankman-Fried was more heroic in this telling than others had described, because he was not doing any crimes this time.
I came to the conclusion that the average person is smart during the line of questioning that Danielle Sassoon gave to Sam Bankman-Fried. Maybe they don’t know what it is. Maybe they’ll never read Ulysses. Maybe they won’t be able to code. When they see bullshit they know how to identify it.
Sam Bankman-Fried During His Cross-Examination: A Demonstration of the First Day of His Preparatory Lawful Trials
If Bankman-Fried has moved into the Clintonian territory, you did fucked up, son. The stupid will see through the argument you make.
At various points during Sam Bankman-Fried’s cross examination, I saw jurors shake their heads, frown and gesture towards each other. Personally, I now have a Pavlovian fear response to the phrase “Is it your testimony that…”
The day did not start as an actual 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. Gary Wang, Caroline Ellison, and Nishad Singh all had text messages, documents, code snippets, and so on to corroborate their versions of events. Bankman-Fried’s testimony had very little of that, and what little it did have was pretty thin.
When you’re a criminal, taking the stand is always going to be risky. It was clear why after a minute into the prosecution’s cross-examination.
Cross-examination of Danielle Sassoon, the Attorney for the U.S. Attorney’s Office, on the case of a New York City man, indicted for securities fraud
For Bankman-Fried, the stakes are high. If he is found guilty of securities fraud and other charges, he could be imprisoned for the rest of his life.
Veteran prosecutor Danielle Sassoon, a former clerk with the late Justice Antonin Scalia, is known to be an effective litigator, and in her cross-examination of the defendant, she delivered.
For almost eight hours, the assistant U.S. Attorney for the Southern District of New York asked Bankman-Fried a litany of incisive questions. She moved quickly, and dug in whenever the prisoner tried to stop her.
And with each passing hour, Bankman-Fried seemed to get more and more irritated. He often disagreed with how Sassoon characterized his past comments — in trial testimony, but also in media reports.
At times, he seemed resigned. Bankman-Fried slumped in front of the microphone, and when the prosecutor asked him to read his prior statements aloud, he did so with unmistakable reluctance.
Bankman-Fried did media interviews even after his companies collapsed and he was indicted. He opined on X, formerly known as Twitter. He wanted to start his own newsletter.
Bankman-Fried claimed that he was someone who was only struggling to keep up with the fast growth of FTX, and did not realize the extent of its troubles.
There was no question that Sassoon was prepared. Bankman- Fried would ask him if he could remember when he would use evidence like an email, a tweets, or an excerpt from an interview.
Bankman-Fried was able to lay out his defense, much more gently, when he was questioned by Mark Cohen.
A number of small mistakes and a number of larger mistakes were made by Bankman-Fried. He said there wasn’t a dedicated risk management team.
Bankman-Fried said that they did not have a chief risk officer. There were many people involved in risk management, but no one was dedicated to it, and there were a lot of oversights.
He blamed his top lieutenants at FTX and Alameda for mismanaging things, including Caroline Ellison, a former girlfriend and CEO of Alameda, who had testified he had directed her to commit crimes.
Bankman-Fried, for example, said that when Ellison led Alameda, she failed to hedge the firm’s investments adequately, which made it vulnerable to steep market downturns.
Source: Sam Bankman-Fried took a big risk by [testifying in his own trial](https://lostobject.org/2023/10/25/sam-bankman-fried-will-testify-in-his-defense-which-may-be-a-risk-for-his-life/). It did not go well
The trial of Ben McKenzie in the Overflow Rooms of a Wall-Centrifugal Physicist Jeffrey Bankman-Fried
The testimony attracted many celebrities, including actor Ben McKenzie. The former star of “The O.C.” and “Gotham” is now a “crypto skeptic” and the co-author of a bestseller about cryptocurrency.
Michael Lewis, the best-selling author who has just penned a book about Bankman-Fried, was also there. He wearing Hoka running shoes and a down jacket followed proceedings in the overflow rooms before securing a seat in the courtroom near Bankman-Fried’s friends and family.
Tiffany Fong gained a lot of respect during the trial after she interviewed Bankman-Fried for hours when he was under house arrest.