Oct 30, 2023 - Economy & Business

Sam Bankman-Fried hammered on conflicting messages on witness stand

A sketch of Sam Bankman-Fried on the witness stand. Illustration: Brady Dale/Axios

Sam Bankman-Fried appeared to have many faces, one he presented to employees of his crypto exchange and trading firm, another for members of Congress, and one for social media, according to prosecutors.

Driving the news: The cross examination of SBF began Monday morning, with U.S. assistant attorney Danielle Sassoon tearing into the former FTX chief, focusing on his tendency to say one thing, and then say — and do — another.

Details: Didn't SBF present FTX to the public as a "safe" exchange? Sassoon asked. When he didn't remember, she pulled up a company advertising line that said as much.

  • She asked him about a document he submitted under oath to Congress called "FTX key principles," that promised, among other things, that FTX wouldn't use customer assets.
  • SBF had a caveat: "not in an improper way." Sassoon shot back, "we'll come back to that."

She put up private messages between SBF and others where he says "f**k regulators," and asked him whether he called people on Crypto Twitter "dumb motherf**ers." ("A subset of them, yes," he replied).

  • When Sassoon pointedly asked him whether he considered himself a "good storyteller," SBF was was slow to respond.
  • When she pressed, asking how else he might have raised billions of dollars from investors, he said he wasn't sure what to credit for FTX's success.

The big picture: Bankman-Fried's testimony transitioned Monday from direct examination to pointed questions from prosecutors.

  • Sassoon repeatedly asked SBF about his recollection of statements, and when when he demurred, followed up with evidence of chat messages, statements from media interviews and other forms of documentation.

Meanwhile, earlier Monday SBF finished up direct examination from his own lawyers, in which he described very different versions of conversations with his FTX and Alameda Research lieutenants from the ones they told in their own prior testimonies.

Between the lines: In June or July, SBF said he "organized" a conversation with Alameda CEO Caroline Ellison saying: "If there was another 50% crash, I was worried Alameda might be insolvent."

  • He said Ellison "started crying" and offered to resign during the conversation.
  • He said that he told her "it was her decision," but encouraged her to hedge Alameda's positions. When the market crashed again in November, he said the hedges Ellison chose to put on were ineffective.

Another prior witness, former FTX engineering director Nishad Singh, had become "actively suicidal," SBF said. He characterized some of the messages and communications Singh previously testified about as efforts to try to soothe him.

What's next: Cross examination is continuing Monday afternoon.

Go deeper: SBF broadly disallowed from talking about counsel in defense

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