Friday, May 24, 2024

On the second day of Sam Bankman-Fried’s fraud trial, his lawyer asserted that every decision leading to the collapse of his FTX crypto exchange was made in “good faith.” However, the testimony of 15 government witnesses over the past two weeks has challenged this defense, with many blaming Bankman-Fried for the implosion of FTX. They claimed that he repeatedly lied and treated customer deposits as his personal piggy bank. Prosecutors are set to rest their case on Thursday, after which Bankman-Fried’s lawyers will call their own witnesses, including Bankman-Fried himself. Legal experts believe that his decision to testify is risky but not surprising given the prosecution’s success thus far. The trial has been more damaging to Bankman-Fried than anticipated, with prosecutors presenting a straightforward case and calling fewer witnesses than expected. Bankman-Fried’s testimony could either be a game-changer for the defense or further harm his case. Despite the obstacles faced by the defense, Bankman-Fried’s lawyers have been limited in their ability to call expert witnesses or raise certain legal arguments. Judge Lewis A. Kaplan has closely controlled proceedings, frequently interrupting the defense and overruling objections. The most damaging testimony has come from Bankman-Fried’s close advisors and friends who have pleaded guilty in the case and cooperated with prosecutors. They claimed that Bankman-Fried knew FTX couldn’t return $8 billion in customer money and ignored normal business rules. The defense tried to question their motivations for cooperation, but prosecutors repeatedly objected. Bankman-Fried’s defense team is attempting to portray him as a young and inexperienced entrepreneur who made reasonable business decisions, similar to the defense used by Theranos founder Elizabeth Holmes in her fraud trial. Holmes was convicted and sentenced to prison. Bankman-Fried’s trial is expected to conclude within a month.

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