Sam Bankman-Fried took to the witness stand on Thursday, but only after Judge Lewis Kaplan had sent the jury home for the day, according to Inner City Press. The move suggests he'll have to rule on what parts of the testimony will end up being admissible.
Bankman-Fried answered initial questions about communication, saying he'd used platforms including Slack and Signal, according to Inner City Press. He said there had been "security concerns" at the company's Hong Kong headquarters, and acknowledged third parties had been hacked, although he said there was never a core breach.
The defendant's attorney Mark Cohen questioned his client about the use of the auto delete option available to users of Signal's messaging app before asking a very pointed question that goes to the heart of Bankman-Fried's defense. "Did you believe taking FTX deposits through Alameda was legal?" asked Cohen.
To which Bankman-Fried said "I did."
Defendant responds to question about Alameda investments
Cohen also questioned Bankman-Fried about the advice he received from FTX's lawyers in regard to making investments. "I told [FTX's legal representatives] of an investment I wanted to make. Sometimes instead of Alameda being the investor, I would be. I was thinking about it from a business perspective," said Bankman-Fried.
His laywer then asked: "Did you take comfort in that the lawyers structured it?"
"Yes," replied Bankman-Fried replied.
It's the first time the court has been able to hear his version of events, as he's not been able to do much so far other than to take notes on a laptop as government prosecutors presented their side of the story.
The decision to put Bankman-Fried on the stand could be risky, but it's also been seen as a possible Hail Mary move after prosecutors have spent weeks in court advancing their narrative. The defense seems set to mount a very short case, however, leading many to speculate as to just what their strategy might be. One ex-assistant U.S. attorney said they might be aiming for a stalemate via a hung jury rather than betting on a verdict of not guilty.
Testifying without jury 'super rare'
The decision to have Bankman-Fried testify without the jury took some people by surprise. Former federal prosecutor and ex-assistant U.S. attorney Josh Naftalis called the procedure “super rare,” adding that there must be more to the decision.
“There’s obviously something specific that he and the lawyers are focused on that they want to get some more detail on,” said Naftalis, now a partner at Pallas Partners law firm.
SBF faces decades in prison if convicted
Bankman-Fried faces decades in prison if he is convicted on a slew of charges, including fraud, over allegations that he and other FTX executives used billions of customer assets to make their own failed investments. The crypto exchange filed for bankruptcy protection late last year.
His testimony had been expected to last at least the rest of the day, with cross examination by the prosecution expected tomorrow, although that could now change depending on when the jury is brought back.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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