(New York) Former cryptocurrency superstar Sam Bankman-Fried was interviewed for the first time on Thursday during a technical hearing in his criminal trial, which immediately placed him in an uncomfortable situation.
Federal Judge Lewis Kaplan took the unusual step of first hearing the accused without the jury present, before proceeding with his hearing under normal trial conditions on Friday.
It was about discussing technical aspects of his testimony, and not a complete hearing.
“SBF” is on trial for having organized the illegal use of funds deposited on its cryptocurrency exchange platform FTX without the knowledge of clients.
Up to $14 billion was siphoned off to fund the often risky investments of his investment company Alameda Research.
While the hearing initially seemed limited to points of detail, Danielle Sassoon, representing Manhattan federal prosecutor Damian Williams, went much further.
In particular, she asked him whether the principle of Alameda’s use of funds placed on FTX had been recorded in an internal document, which he could not confirm.
Initially very calm and structured in his statements, Sam Bankman-Fried was visibly taken by surprise and delivered evasive and tortuous answers, which earned him several remarks from Judge Kaplan.
“The accused has a curious way of answering questions,” said the magistrate.
Questioned by the representative of the public prosecutor, SBF did not clearly say whether it knew that Alameda was in debt to FTX or that the investment company benefited from processing privileges in relation to other clients of FTX. the platform.
Throughout the hearing, defense attorney Mark Cohen expressed numerous reservations, saying the issues went well beyond the scope of a technical hearing, without Judge Kaplan intervening.
“Our position is that the use of the funds was not improper and that our client did not see it as improper,” the lawyer explained.
Sam Bankman-Fried, for his part, has repeatedly contested Danielle Sassoon’s formulation, according to which Alameda used funds from FTX clients to invest.
By the time FTX went bankrupt in November 2022, some 8 billion were missing.
Most of this money has since been recovered by liquidators and is expected to be returned to customers in early 2024.
Arriving in the cryptocurrency landscape in 2019, Sam Bankman-Fried quickly won over the industry, but also well beyond, with his clear and educational speech, the American Congress requesting him, on several occasions, for hearings.
But at the hearing on Thursday, this ease was shattered after just a few minutes, boding poorly for his hearing in the presence of the jury this Friday.
Overall, since the opening of this federal trial for fraud and criminal conspiracy, the stature of SBF as a facetious genius of cryptocurrencies has imploded.
Three key witnesses, former collaborators of Sam Bankman-Fried, also undermined his defense, which consisted of accusing his former subordinates, accused of incompetence or thoughtlessness.
At the hearing, witnesses assured – supported by internal documents collected by the prosecution – that the former cryptocurrency tycoon was indeed at the origin of the offenses and had never lost sight of the financial situation of FTX and from Alameda.
The cross-examination by SBF’s lawyers did not reveal any flaws in the story of these former collaborators.
Defendants in criminal trials in the United States often choose not to testify, to avoid incriminating themselves, particularly during cross-examination by the prosecution.
Recently, Harvey Weinstein, Bill Cosby, the singer R. Kelly, Ghislaine Maxwell (Jeffrey Epstein affair), Derek Chauvin (convicted of the murder of George Floyd) or the drug trafficker Joaquín Guzmán, known as El Chapo, have all preferred not to express to the court.