The lawyer representing FTX founder Sam Bankman-Fried informed a federal judge on Wednesday that his client intends to testify at his trial for fraud. This puts an end to speculation about whether the highly visible figure in the cryptocurrency industry would remain silent in the face of accusations from prosecutors that he embezzled billions of dollars from his clients.
Lawyer Mark Cohen informed Judge Lewis A. Kaplan that he intends to summon three witnesses “and our client will also provide testimony” once the prosecution concludes on Thursday morning.
Cohen addressed the court through a phone and video conference in federal court in Manhattan, following the judge’s prompt for him to reveal any potential defense strategy.
The judge informed him that it was not necessary for him to decide if Bankman-Fried would testify at this time, but Cohen willingly offered to do so.
However, the prosecution and the judge subsequently deliberated on the option of potentially having closing statements as soon as next week.
Bankman-Fried, aged 31, has denied accusations that he misappropriated funds from his clients and investors in order to maintain an extravagant lifestyle and enhance his own image and that of his businesses. He allegedly made significant donations to charitable causes and political candidates in order to bolster his reputation.
He seemed to enjoy publicity as Alameda Research, a hedge fund he started in 2017, and FTX, a crypto exchange that began operating n 2019, became so prominent in the crypto industry that celebrities including NFL quarterback Tom Brady and comedian Larry David did commercials that put a shine on what appeared to be a stunning success story.
In the past month, prosecutors have heavily relied on statements from Bankman-Fried’s close associates, previous high-ranking employees who resided in a luxurious penthouse in the Bahamas with their employer. This was before a sudden influx of customer deposits in November revealed that billions of dollars were missing, ultimately resulting in the downfall of the company.
According to ex-federal prosecutors, Bankman-Fried’s main objective while testifying is to convince one or two jurors that he is a relatable individual who simply lost control of the issues at FTX.
Rachel Maimin, a former federal prosecutor in Manhattan who now practices at Lowenstein Sandler LLP, stated that only he has the ability to tell the story he wishes to share with the jury.
Prosecutors have presented evidence and court documents to support their claim that Bankman-Fried instructed his former subordinates to use FTX customer funds in order to fuel his own personal ambitions and extravagant spending. Jurors have also been shown messages and group conversations in which Bankman-Fried showed little concern for the issues at Alameda Research and disregarded the risks of using FTX money to conceal problems at the company.
Caroline Ellison, Gary Wang, and other individuals provided thorough testimonies regarding Bankman-Fried’s actions. His legal team has faced challenges in trying to discredit their testimonies. Former prosecutors have noted that this leaves only Bankman-Fried or other character witnesses to share his perspective. However, character witnesses are generally considered ineffective in cases involving white-collar crimes.
Joshua Naftalis, a partner at Pallas Partners LLP and former Manhattan federal prosecutor, stated that it is crucial for (Bankman-Fried) to present himself as acting in good faith, despite other witnesses claiming he had intentions to deceive and commit fraud. Naftalis believes this will be a last-ditch effort to sway the jury.
In August, Bankman-Fried was incarcerated after Kaplan determined that he had attempted to sway potential witnesses for his trial. As a result, his $250 million bond, which allowed him to reside with his parents in Palo Alto, California, was revoked. He was extradited from the Bahamas in December.
For additional news about Sam Bankman-Fried and FTX, check out the AP coverage at: https://apnews.com/hub/sam-bankman-fried- and-ftx