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Sam Bankman-Fried’s credibility questioned by prosecutors during cross-examination

Prosecutors pointed out inconsistencies in Bankman-Fried’s public statements before FTX collapsed in a four-hour grilling.

By Zoltan Vardai

From the Forkast crypto archive

NEW YORK, NY – DECEMBER 22: FTX founder Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on December 22, 2022 in New York City. Bankman-Fried, who was indicted on December 9th and arrested 3 days later by Bahamas law enforcement at the request of U.S. prosecutors, consented to extradition to the U.S. where he is facing eight criminal counts of fraud, conspiracy and money-laundering offenses which includes making illegal political contributions. He is potentially facing life in prison if convicted. He was released on $250 million bond with the bail package requiring him to stay with his parents in California. (Photo by David Dee Delgado/Getty Images)

Assistant U.S. Attorney Danielle Sassoon questioned Sam Bankman-Fried’s credibility during Monday’s cross-examination in New York, highlighting public statements made by the FTX founder before and after the collapse of the Bahamas-based cryptocurrency exchange.

See related article: Little-known FTX co-founder Gary Wang testifies in Sam Bankman-Fried trial

Fast Facts

  • Sassoon confronted Bankman-Fried, the former chief executive officer of FTX, with his own public statements promising that customer assets are safe and redeemable at any time.
  • Sassoon’s questioning aimed to show that Bankman-Fried’s public statements were false and that he was knowingly draining FTX customer funds to spend on real estate, celebrity promotions and political donations.
  • Toward the end of the four-hour cross-examination, the prosecutor asked Bankman-Fried about private messages where he used an expletive to dismiss the role of crypto regulators.
  • “I said that once,” Bankman-Fried replied.
  • Sassoon asked if Bankman-Fried’s pursuit of regulations was just an attempt to garner more public trust, to which he answered: “I said something related to that, yes.”
  • She also quizzed Bankman-Fried about an interview before the FTX collapse, where he said Alameda Research had no special privileges as a customer trading on the exchange. FTX co-founder Gary Wang testified in the trial in early October that Alameda had a US$65 billion special credit line from FTX. Bankman-Fried acknowledged the special line of credit during Monday’s cross-examination.
  • FTX filed for bankruptcy in the U.S. on Nov. 11, 2022, along with over 100 affiliates. Bankman-Fried has been charged with seven counts of wire fraud and money laundering and faces a maximum of 115 years in prison if convicted.  
  • Bankman-Fried’s criminal trial started on Oct. 4. He has pleaded not guilty to charges of defrauding his customers and investors of billions of dollars.
  • Bankman-Fried will return to the stand on Tuesday. 

See related article: Crypto trust on trial: Bankman-Fried faces judgment