Sam Bankman-Fried, the founder and former CEO of the failed cryptocurrency exchange FTX, made the surprise decision to testify in his criminal trial on Thursday in spite of the prospect of aggressive cross-examination from government lawyers.
The testimony got off to a fitful start on Thursday, with reports emerging that the judge in the case announced early that afternoon that his testimony would have to wait until Friday at the earliest, and later reports that testimony had gotten underway. In any event, observers find it hard to believe that Mr. Bankman-Fried would dare to take the stand at all in the face of a strong prosecution case emphasizing personal accounts from people he once considered friends and colleagues.
Personal Vanity and Desperation
The stance adopted by Mr. Bankman-Fried in the opening rounds of his testimony does not surprise legal experts who have followed the FTX saga and the trial, which commenced on Oct. 3.The relatively few high-profile executives who testify on their own behalf often fail to make the desired impression or change the outcome of their criminal proceedings. But in the case of Mr. Bankman-Fried, the need to hit back at former friends and colleagues who have relentlessly pilloried him on the stand in recent weeks may simply have been too powerful to resist.
Moreover, Mr. Bankman-Fried may have felt emboldened by the absence of jurors during his testimony. Even at this point in his legal saga, he has held out hope of convincing at least the judge that he was an entrepreneur with a brilliant idea whose failure resulted from mistakes of the head, not of the heart.
That’s the view of Timothy Hsieh, a professor at Oklahoma City University School of Law specializing in blockchain, information technology, social media, and internet issues. In a discussion with The Epoch Times, Mr. Hsieh shared his analysis of Mr. Bankman-Fried’s bold and risky move.
“I think a lot of it has to do with, number one, the fact that it would not be in the presence of a jury. Another big part of it is probably the fact that there were several weeks of other testimony that the jury did hear— from his former colleagues and friends and also his ex-girlfriend, Caroline Ellison, who pleaded guilty and agreed to work with the government,” said Mr. Hsieh.
Mr. Hsieh acknowledged that attorneys in such high-profile cases often caution their client not to testify, given the danger that prosecutors will “tear apart” the witness on the stand. But, he observed that it seems Mr. Bankman-Fried has been yearning to get a word in, to tell his side of the story, especially since those in his orbit have felt so entitled to give theirs.
The fact that a jury would be absent does not mean that Mr. Bankman-Fried would be howling into the wind, so to speak, Rather, it presented a chance to testify on the record without the psychological burden of a jury’s scrutiny. The fallen mogul could have seen a chance to counterbalance the negative portrait painted by his accusers and submit facts for the official record that would, in the end, influence the jury’s decision.
Hitting Back at the Turncoats
In all likelihood, Mr. Bankman-Fried felt stung, in particular, by the highly accusatory testimony from people with whom he was long personally and professionally close and whose loyalty he took as a given. In particular, he may resent that his former girlfriend Caroline Ellison divulged that he was fully aware of the state of FTX’s and Alameda Research’s finances. And that the CEO of FTX personally directed her to make high-risk investments and to use customer funds for purposes that FTX clients neither knew nor approved in advance.Sworn statements from former chief technology officer Gary Wang, and former head of engineering Nishad Singh, have been no less flattering to Mr. Bankman-Fried. Taken together, all the adverse testimony has snowballed into a damning case, so the embattled mogul may now feel he alone has the moral imperative and the psychological need to refute on the witness stand.
“He may be thinking, finally, here will be my chance to tell my side of the story. That can be potentially impactful, game-changing, something that could possibly change the outcome of the trial. If he has the opportunity to do that, when usually it would not be considered a wise move, he could be able to get some much-needed traction here,” said Mr. Hsieh.
Given all that has come to light since the trial started, Mr. Bankman-Fried and his lawyers may feel that there is little left to lose at this point.
Moreover, Mr. Bankman-Fried may yet hope to appeal to a psychological component of American jurors who respect bold and ambitious entrepreneurs and even people who, like National Security Agency (NSA) whistleblower Edward Snowden, may believe they are bending or breaking the law in good faith, Mr. Hsieh speculated.
Mr. Snowden was the NSA consultant who, in 2013, leaked highly sensitive classified information about government surveillance programs to The Guardian newspaper and other sources. He has been the subject of articles, editorials, podcasts, and an award-winning 2014 documentary, “Citizenfour,” presenting him as an operative who risked his livelihood and freedom for the public good and broke the law for totally legitimate reasons.
The U.S. government at present may feel significant pressure to show it has the speculative cryptocurrency market under control and is actively stamping out fraud. Hence, Mr. Bankman-Fried, as one of the most visible public figures associated with cryptocurrency and digital assets, might have become a scapegoat and the target of severe regulatory overreach. At least, that is what the former high-flying mogul may hope to convince the public to believe.
“He’s very motivated to share his story of being this visionary who is now a martyr, because the government is making an example of him. ‘He had this great idea; he was never trying to defraud anyone. He came up with a brilliant concept, and people have not been getting a chance to hear his story.’ That’s the push, making him want to tell his tale so others will sing about it in years to come,” Mr. Hsieh said.
