adminSam Bankman-Fried, founder and former CEO of defunct crypto exchange FTX, testified at his criminal fraud trial on Thursday without the jury present. Judge Lewis Kaplan of Manhattan federal court said he would determine what testimony can be repeated to the jurors.
The decision to send home the jury around midday came after federal prosecutors objected to Bankman-Fried’s plan to testify about lawyers being involved in some of FTX’s decision-making.
The trial began Oct. 4 and included several former close lieutenants of Bankman-Fried testifying on behalf of the prosecution.
Kaplan criticized Bankman-Fried on Thursday for being evasive in his answers. Under cross examination by the prosecution, Bankman-Fried said he couldn’t remember whether he had conversations with lawyers about key decisions while running the exchange, The Wall Street Journal reported.
He also said he was “not sure” who decided initially to use a subsidiary of related company Alameda Research to take in customer funds from FTX. Prosecutors have accused him of a conspiracy to use $10 billion in customer funds for pet projects, including venture capital investments, political donations, and luxury real estate.
Prosecutors also asked him about conversations with FTX lawyers about using an auto-delete setting on the Signal messaging app. Bankman-Fried testified earlier in the day that FTX used encrypted messaging apps such as Signal for security concerns because the site was the target of hacking attempts.
Questioning by the defense focused on how Bankman-Fried relied on what the firm’s lawyers told him. For example, Bankman-Fried said he “skimmed” versions of FTX’s terms of service, which were drafted by in-house and outside lawyers for the firm. He also said lawyers decided to structure promissory notes representing payments from Alameda to Bankman-Fried and others as loans.
Bankman-Fried testified during questioning from his own lawyer that he took comfort that the lawyers had structured the loans. He also said he believed that under FTX’s terms of service, Alameda was allowed in many circumstances to borrow funds from the exchange.
Kaplan said he expects to hand the jury the case for deliberation sometime next week, according to CNN. Bankman-Fried returns to the courtroom Friday at 9:30 a.m. for more testimony.
Write to Liz Moyer at [email protected]
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