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Bankman-Fried Gets Last Chance to Plead His Case

Sam Bankman-Fried

Sam Bankman-Fried is set to wrap his testimony in his federal fraud trial Tuesday (Oct. 31).

And as a report by CNBC notes, this will mark the FTX founder’s last opportunity to convince jurors of his innocence in what prosecutors say is one of the largest financial frauds in history.

Bankman-Fried, 31, had spent Monday’s court session under cross-examination, something that is set to continue Tuesday. Once that concludes, Bankman-Fried’s lawyers will conduct a redirect examination before resting their case.

Beyond that, the only remaining witnesses are a pair of rebuttals from prosecutors: an FBI data analyst, and an employee of Apollo, the investment firm that had been called in to help fund FTX’s rescue.

FTX needed rescuing last fall after a liquidity crisis brought what had been one of the largest, most-respected cryptocurrency exchanges to bankruptcy.

Prosecutors allege the company collapsed following a scheme by Bankman-Fried to use customer funds to pay for venture investments, real estate expenditures and political donations. He faces what could add up to a life sentence if convicted.

Bankman-Fried has maintained his innocence, acknowledging that FTX under his leadership failed at proper risk management but denying he defrauded anyone or took customer money.

He has also placed blame on former colleagues/friends, such as Caroline Ellison, ex-CEO of FTX sister company Alameda Research and Bankman-Fried’s ex-girlfriend.

As PYMNTS reported last week, Bankman-Fried testified that he repeatedly asked Ellison and other Alameda executives to hedge the firm’s risks, but that although he checked on them periodically they failed to do so — leaving the company highly exposed when the cryptocurrency market entered a down period.

The CNBC report says that Bankman-Fried offered more descriptive answers when questioned by defense attorneys, but switched to clipped responses — “Yep,” “I don’t recall” — during cross-examination on Monday.

In some cases, that report says, prosecutors followed his answers with exhibits – including a tweet, interview or congressional testimony — meant to impeach that response.

For example, Bankman-Fried said during cross-examination couldn’t be sure whether he assured customers that Alameda Research played by the same rules as others. Assistant U.S. Attorney Danielle Sassoon then produced a tweet from him directly dealing with the topic, as well as an email in which he said that Alameda’s account is like everyone else’s.

“Pleading the fifth may well be one of the best-known pieces of legal advice, at least in America, but Sam Bankman-Fried can’t stop opening his mouth and giving interviews,” PYMNTS wrote last year, after FTX’s collapse but before any criminal charges were filed.

He had just spoken with a reporter at the New York Times Dealbook Summit, and apologized both on Twitter and in a letter to his one-time employees.

Back then, Bankman-Fried still claimed he could turn his company around. Now, his greatest worry is avoiding a decades-long prison term.