Sam Bankman-Fried has 1 a lot more shot at steering clear of prison as legal trial set to wrap up

Sam Bankman-Fried, who pleaded not guilty to criminal fraud prices tied to the collapse of his crypto empire, has a single previous chance to get a Manhattan jury to believe him.

Just after two times on the witness stand, Bankman-Fried is set to wrap up his testimony on Tuesday. All that’s remaining is a few far more several hours of cross-examination by prosecutors, adopted by a redirect evaluation by Bankman-Fried’s team. After that, the protection ideas to rest its case.

The around four-7 days demo has mostly consisted of govt-supported testimony from Bankman-Fried’s previous close close friends, confidants and leading executives at crypto trade FTX and sister hedge fund Alameda Investigate. They all singled out Bankman-Fried as the mastermind of a plan to use FTX purchaser income to fund every thing from undertaking investments and a large-priced condo in the Bahamas to masking Alameda’s crypto losses soon after the market crashed previous 12 months.

Bankman-Fried’s defense unsuccessful to land any sizeable blows in cross-examining the prosecution’s key witnesses, including Caroline Ellison, the defendant’s ex-girlfriend and the previous head of Alameda. When it was protection attorney Mark Cohen’s opportunity to choose the direct, he only named 3 witnesses, with the bulk of his case using on Bankman-Fried’s capability to convince the jury of his tale.

The 31-12 months-aged former billionaire, whose crypto organizations spiraled into personal bankruptcy more than the training course of a couple of days last November, informed jurors in his 1st working day on the stand on Friday that he didn’t commit fraud and that he believed FTX’s outdoors expenditures, like shelling out for the naming rights at a sports arena, came out of company earnings.

When questioned by Cohen on Friday early morning if he defrauded any one, Bankman-Fried stated, “No, I did not.” His attorney then requested if he took purchaser funds, to which Bankman-Fried mentioned, “No.”

Bankman-Fried, the son of two Stanford University authorized scholars, faces 7 prison counts, including wire fraud, securities fraud and revenue laundering, that could land him in jail for everyday living if he is convicted. His argument to the jury is that he created blunders, like not owning a possibility management group in location, which led to “sizeable oversights.” But when it arrives to the central problem — what took place to billions of bucks in consumer revenue — Bankman-Fried won’t offer you any distinct explanations and promises to not definitely know.

Ellison, who was 1 of quite a few witnesses cooperating with the governing administration on a plea deal, experienced a much more precise respond to, in her Oct. 10 physical appearance on the stand.

“We ultimately took about $14 billion, some of which we were ready to spend back,” she mentioned. “I sent equilibrium sheets to loan companies at the course of Sam that improperly mentioned Alameda’s property and liabilities.”

Ellison said Alameda siphoned various billion dollars from FTX prospects and that Bankman-Fried had not only set up a procedure to steal the money but also directed Ellison and some others to use purchaser cash to repay financial loans in the ballpark of $10 billion.

Bankman-Fried testified that he was not conscious of the amount Alameda was borrowing from FTX, or its theoretical max. As prolonged as Alameda’s net asset value was positive and the scale of borrowing was acceptable, growing its line of credit score so that Alameda could hold filling orders was good, he reported. Before testimony from former engineering director Nishad Singh and co-founder Gary Wang suggested the line of credit rating was lifted to $65 billion, a amount Bankman-Fried stated he was not knowledgeable of.

Prosecutors entered corroborating elements, including encrypted Signal messages and other inner files that show up to demonstrate Bankman-Fried orchestrating the expending of FTX buyer dollars.

Bankman-Fried attempted to clarify absent some of those fees. For illustration, the naming legal rights to Miami’s basketball arena would price tag $10 million a calendar year, or roughly 1% of income, and supply returns nicely in excess of that due to the fact of the model awareness it would create for even an “common stage sports activities supporter,” he said.  He extra that he thought the cash was coming from revenue from the trade and returns from undertaking investments, as opposed to purchaser funds.

Similarly, Bankman-Fried testified that he thought the lavish Bahamas houses were staying paid out for with FTX working money that came from profits and undertaking investments. He explained acquiring obtainable residence to rent was a required incentive if the business required to poach developers from Facebook and Google.

On Monday, Bankman-Fried’s approach shifted to one of blaming lots of of his previous leading lieutenants, who’d earlier testified versus him.

When it came to Ellison, Bankman-Fried stated that he continuously attempted to make guaranteed she was employing adequate hedging approaches at Alameda to make certain the fund failed to collapse less than the fat of tumbling crypto rates.

Bankman-Fried testified about various conversations on the issue he’d had with Ellison between June and September 2022, and mentioned he was notably worried about the decline in Alameda’s net asset value from $40 billion the prior calendar year to $10 billion.

The market place experienced now dropped 70% and if it fell a further 50%, he was frightened the agency would be bancrupt, Bankman-Fried instructed the jury.

“She commenced crying,” Bankman-Fried stated, about Ellison’s reaction when he instructed her that. “She agreed.”

Bankman-Fried mentioned Ellison made available to resign around the make a difference, but the defendant testified he wasn’t focused on blame or past failures but rather generating absolutely sure that Alameda remained solvent.

In September, he checked in yet again with Ellison about the hedging exercise, Bankman-Fried testified. Ellison instructed him Alameda experienced hedged. He questioned about the scale of the trades and explained his intuition was that they could have been two times the measurement. Soon after Ellison despatched him spreadsheets about the trades, she agreed there was extra place to hedge and she did so, Bankman-Fried claimed.

In going for walks as a result of FTX’s failure, Bankman-Fried discussed the purpose performed by Singh, who was also known as as a govt witness. Bankman-Fried highlighted Singh’s personalized monetary difficulties, and said he was suicidal with a therapist on connect with 24/7 to watch around him. Bankman-Fried mentioned he was making an attempt to convenience Singh about his financial loans and expenditures in aspect to prevent him from hurting himself.

In describing the swift downfall of FTX, Bankman-Fried mentioned that shopper withdrawals had swiftly greater from $50 million a day to $1 billion a day. He mentioned it was like a operate on the bank and he was extremely concerned because the only way to withdraw all buyer cash was to liquidate each open up margin trade.

Bankman-Fried defended his tweets from early November that he said were made to simplicity customer fears.

Relating to the “belongings are great” tweet he wrote in the course of the stress, he reported he imagined Alameda’s web asset worth was roughly $10 billion and that FTX failed to have a hole in its harmony sheet.

“My look at was the trade was Alright and there was no gap in the property,” he told the court.

In testimony afterwards on Monday, Bankman-Fried was confronted with cross-assessment as the governing administration had its turn with the defendant. Significantly from the far more descriptive answers Bankman-Fried furnished in reaction to Cohen’s inquiries, the prosecutors inquiries were being fulfilled with a ton of fast replies like “Yep” and “I don’t recall.”

In some circumstances, his responses ended up right adopted with a government show, this kind of as a tweet, job interview transcript, congressional testimony or email, supposed to dispute his solution.

For illustration, Assistant U.S. Legal professional Danielle Sassoon asked Bankman-Fried if he certain persons that Alameda played by the very same policies as others on the FTX trade. Bankman-Fried said he wasn’t guaranteed. The federal government adopted by displaying a tweet from him directly addressing the subject matter alongside with an email in which he wrote that Alameda’s account is like anyone else’s.

Following the authorities wraps its questioning on Tuesday and the protection will get its shot at redirect, all that’s remaining on the docket is two witness rebuttals from the prosecution. Just one will appear from an FBI facts analyst and the other from an staff at expense agency Apollo, which had been in talks to help finance an FTX rescue.

At that issue, Bankman-Fried’s destiny will lie in the fingers of the 12 jurors who have spent the past 4 weeks sitting down a couple ft absent from the defendant in a lessen Manhattan courtroom.

If you are getting suicidal ideas or are in distress, contact the Suicide & Crisis Lifeline at 988 for help and help from a educated counselor.

— CNBC’s Dawn Giel contributed to this report

Watch: Sam Bankman-Fried walks jury through final times of FTX