FTX founder Sam Bankman-Fried set to testify in criminal trial

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

FTX founder Sam Bankman-Fried is expected to begin testifying in his own defence on Thursday, after the government rests its case in the criminal trial over the collapse of his cryptocurrency empire.

The unusual move by the 31-year-old, who faces the prospect of a lifetime behind bars if convicted on charges including wire fraud and money laundering, comes after a New York jury heard several days’ worth of damning testimony from Bankman-Fried’s former colleagues and friends, as well from his ex-girlfriend Caroline Ellison, who pleaded guilty last year and agreed to co-operate with the government.

Defence attorneys tend to advise clients against testifying, fearful of direct questioning from prosecutors. But Bankman-Fried has been keen to present his side of the story ever since crypto exchange FTX collapsed with a multibillion-dollar hole in its balance sheet last November. He has granted multiple interviews to journalists and the author Michael Lewis from his parents’ Californian home before he was jailed for breaching his bail conditions this summer.

After being sworn in, Bankman-Fried will first answer questions under oath from his own lawyers before being cross-examined by prosecutors.

Lawyers for Bankman-Fried are likely to try to elicit testimony in which the former entrepreneur — who has long claimed he was amassing wealth in order to eventually give it away to charitable causes — underlines he was acting in “good faith” before being caught unawares by a sharp downturn in the crypto market and being smeared by a competitor.

“If he gets on the stand and appears unbelievable or untrustworthy — or extremely believable, and you see a really sympathetic human side to him — that could be game-changing,” said Rachel Maimin, a former federal prosecutor in the US attorney’s office that charged Bankman-Fried, who is now in private practice at Lowenstein Sandler.

“In a case like this where the whole entire case rotates around [Bankman-Fried’s] state of mind and his intent, nobody is able to testify to that better than the person himself,” she added. If jurors are convinced, “it will be the most important evidence in the case”.

In a letter to the judge last week, Bankman-Fried’s lawyers also raised concerns that he was not receiving doses of Adderall, a drug used to treat attention-deficit hyperactivity disorder, while he is in court, arguing that this would impair his ability to testify in his own defence. The court subsequently heard the medication issue had been resolved.