Ex-crypto golden boy Sam Bankman-Fried is set to face a blistering cross-examination by Manhattan federal prosecutors Monday — and then a planned mysterious “rebuttal” witness.
The MIT grad, 31, coolly tried to weasel out of blame in court Friday for his alleged $10 billion theft from FTX investors, claiming he knew “basically nothing’’ about cryptocurrency when he started his business and that it imploded because of “mistakes,’’ not crimes.
But he won’t be able to dodge getting slammed by prosecutors under cross-examination when his criminal trial resumes Monday morning.
Prosecutors also hinted Friday that they then plan to call a “rebuttal” witness after he leaves the stand.
“We are expecting a brief rebuttal case,” a member of the federal prosecution team told Judge Lewis Kaplan after jurors were sent home for the day.
The feds did not identify the witness or explain how they would “rebut” aspects of the accused crypto crook’s account.
The accused crypto thief — who is charged with splurging with FTX user funds on such luxurious goodies as millions of dollars in Bahamas real estate — testified Friday, “We thought we could build the best product on the market,” when asked by his lawyer why he founded his company.
The lawyer, Mark Cohen, replied, “Did it work out that way?”
Bankman-Fried, dressed in a gray suit and purple tie on the witness stand inside a packed federal courtroom in lower Manhattan, responded a flat, nasally monotone, “No, it turned out basically the opposite of that.
The accused fraudster showed little to no emotion during his five-plus hours of testimony Friday.REUTERS
“A lot of people got hurt,” added the defendant, whose parents are both Stanford Law School professors.
Bankman-Fried showed nearly no emotion — and little to no remorse — while providing various explanations for his companies’ November 2022 meltdown.
The fallen crypto mogul claimed that FTX, a company he owned and ran, had “significant oversights” in its “risk management.”
He also accused his ex-girlfriend Caroline Ellison, who served as CEO of his hedge fund Alameda Research, of not “hedging” the company’s bets months before the feds say Bankman-Fried stole FTX funds to pay off Alameda’s multibillion-dollar debt.
Ellison has taken a plea deal and flipped on Bankman-Fried. She told jurors earlier this month that Bankman-Fried had the final say on all major Alameda decisions and kept her story straight under questioning by the disgraced crypto magnate’s lawyers.
Bankman-Fried’s bail was revoked after a judge found that he’d leaked star witness Caroline Ellison’s diary to a reporter.AP
While facing the friendly questioning of his own lawyer, the ex-billionaire testified Friday that he “made a number of small mistakes and a number of large mistakes” while running FTX.
But he denied “taking” customer funds, contradicting testimony from three former executives, including Ellison, who told jurors that Bankman-Fried used FTX customer assets to prop up an underwater Alameda.
“Did you defraud anyone?” Bankman-Fried’s lawyer asked him shortly after he took the stand just before 10 a.m.
“No, I did not,” the defendant replied.
Prosecutors are set to get a crack at the disgraced crypto king during a cross-examination Monday that could be brutal for Bankman-Fried, if Thursday’s dry run was any indication.
The California native tried to squirm his way out of answering questions during a surprise evidence hearing — held after jurors were sent home — repeatedly stammering, “I don’t recall” as prosecutor Danielle Sassoon interrogated him.
Bankman-Fried’s parents, Stanford Law School professors Joseph Bankman and Barbara Fried, have attended the trial.AFP via Getty Images
Later Friday, the MIT grad tried to distance himself from computer code that the feds say allowed his hedge fund to pilfer unwitting FTX users’ funds by “borrowing” money it never paid back.
“I wasn’t much of a programmer,” Bankman-Fried claimed.
His ex-girlfriend Ellison has testified that Bankman-Fried in fact directed the company’s engineering chief, Nishad Singh, to write the code allowing Alameda to access the funds.
The California native also testified that he knew “basically nothing” about crypto before founding his crypto-focused hedge fund Alameda in 2017.
“I had absolutely no idea how they worked,” he said of crypto dealings.
He also provided his version of why he split up with Ellison in the spring of 2022, saying, “I didn’t have the time or the energy.”
He also addressed his tpyical schlubby dress code of khaki shorts and a t-shirt.
“I found them comfortable,” he said of the clothing.
Bankman-Fried has pleaded not guilty to seven conspiracy and wire fraud charges and faces what would effectively be a life sentence if convicted.
He is being held at Brooklyn’s Metropolitan Detention Center after a federal judge revoked his bail after finding that he intimidated witnesses by leaking Ellison’s personal diary to a reporter.
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