Of all the deliciously tedious courtroom conversations that have happened between federal prosecutors and failed crypto founder Sam Bankman-Fried—who is standing trial on seven counts of fraud, conspiracy, and money laundering related to the loss of $8 billion of customer funds at his crypto exchange, FTX—one on Tuesday really had it all. Pedantic dissembling! Experienced persistence! The Bahamas! FPOTUS Bill Clinton! It began when assistant U.S. attorney Danielle Sassoon asked Bankman-Fried what ought to have been a straightforward question on cross-examination, and things quickly snowballed into the absurd:
Sassoon: In April 2022, you invited the Bahamian prime minister to a private dinner hosted by FTX, right?
Bankman-Fried: When was that? Sorry?
Sassoon: Around April of 2022.
Bankman-Fried: It’s possible. I don’t remember what that’s referring to.
Sassoon: Well, do you recall inviting him to a private dinner in 2022 with former president Bill Clinton and former U.K. prime minister Tony Blair?
Bankman-Fried: No, but it doesn’t surprise me.
Sassoon: Did you in fact attend a dinner with the Bahamian prime minister, Bill Clinton, and Tony Blair?
Bankman-Fried: During the conference, the FTX conference, there was a—something like a dinner with them, yeah.
Sassoon: When you say “something like a dinner,” was it a dinner?
Bankman-Fried: It may—I don’t remember whether there was food. It may have been.
Sassoon: And you were there, right?
Bankman-Fried: Yup.
Perhaps out of deference for his may-have-been-dinner-mate Clinton, Bankman-Fried thankfully avoided bickering over the meaning of the word “is.” Still, he argued about plenty of other terms during his three-ish days on the stand. For example, less than a minute into Sassoon’s cross, which began Monday afternoon, Bankman-Fried said the phrase: “Depends on how you define ‘trading.’” The next day, he haggled with Sassoon over the meaning of “transact with.”
At one point, after being asked whether he remembered making various positive statements about the company he founded, SBF responded, “No, but I may have,” to five consecutive questions. More than once, he called something “effectively correct” instead of just saying yes. And he responded, “I’m not sure what you’re referring to,” to Sassoon’s inquiries often enough that Judge Lewis Kaplan finally broke in.
“The issue is not what she is referring to,” Kaplan admonished, as a few jury members smirked. “Please answer the question.” The question in question: “Generally, do you recall in substance making statements that FTX was a safe platform?” Bankman-Fried’s eventual answer: “I remember things around specific parts of the FTX platform that were related to that. I don’t remember a general statement to that effect. I am not sure there wasn’t one.” Got it!
While Bankman-Fried continued in this manner, a filmmaker sitting next to me in the gallery murmured that the defendant ought to be lifting his face up more, that maybe he might appear more sympathetic if he found better light. When your defense revolves around keeping everything shrouded, however, it turns out there really isn’t much you can illuminate.
United States v. Samuel Bankman-Fried commenced in early October and could conclude as soon as the end of this week. In its closing argument on Wednesday, the government stated that Bankman-Fried had said some version of “I can’t recall” over 140 times in his cross-examination and that, as attorney Nicolas Roos put it, “A pyramid of deceit was built by the defendant. That ultimately collapsed.”
As I watched Bankman-Fried testify in his own defense over the past week, I thought a lot about chaotic spreadsheets. This was, at least in part, because throughout the trial, a lot of .xls files have been entered into evidence, each more tenuous than the last.
There are spreadsheets with line items labeled “Oops this seems like not a thing we should be counting,” like one that Caroline Ellison, the former CEO of Bankman-Fried’s trading firm, Alameda Research, said she prepared. There are spreadsheets where the accounting is rounded not to the nearest decimal, but to the nearest billion. There are spreadsheets where the accounting is labeled with euphemisms, like “exchange borrows,” that mean illicitly wormholed FTX customer funds. There are spreadsheets showing Alameda’s $65 billion line of credit on FTX’s systems, an allowance that was $64,850,000,000 more than that of the next-highest customer. So many spreadsheets, all crowded with tabs, each one lousy with alarming valuations and bad news.
But it wasn’t just the spreadsheets themselves that stood out to me. It was the fact that Bankman-Fried, up on the witness stand, often resembled a spreadsheet himself. Sometimes this was because of the way he processed, added up, divided, and extrapolated his thoughts and testimony in real time, stacking and rearranging his words in linked columns and rows. More often, it was because he said, again and again, that he didn’t know what Sassoon was referring to—a living embodiment of the dreaded #REF! error. Number-loving and load-bearing, Bankman-Fried was, for years, the guy whose base values provided the enterprise value to an entire apparatus of people and industry. Now, his cell contains only his own errors. When he went bust, everything linked to him went broke.
“I trusted Sam,” testified Adam Yedidia, Bankman-Fried’s former MIT classmate who also worked at FTX, in early October. A few days later, Ellison, one of three trial witnesses who were a part of Bankman-Fried’s inner circle and have already pleaded guilty to fraud and conspiracy charges as part of a cooperation deal with the government, described Bankman-Fried as so ambitious that he felt he had a 5 percent chance of becoming president of the United States. Former FTX employee Nishad Singh—whose own bottom line went from “billionaire” to “#REF!” with the collapse of FTX just about a year ago—also recently testified for the prosecution. He was asked how he would describe his relationship with the defendant. “I have always been intimidated by Sam,” Singh began, to the overruled objection of the defense. Singh continued: “Sam is a formidable character, brilliant. So I had a lot of admiration and respect for him. Over time, I think a lot of that eroded, and I grew distrustful.”
When Bankman-Fried took the stand, a will-he-or-won’t-he decision that had been hotly speculated about for weeks, the full arc of all of these descriptions of him was on display. For a time, courtroom observers did get a sense of the once-formidable iteration of Bankman-Fried. And then we also saw that same erosion, right before our eyes.
While most white-collar defense attorneys typically don’t like to have their clients testify—the risks of perjuring oneself, irritating the sentencing judge, or getting pinned down on cross-examination all frequently outweigh the potential upside of, say, charming a juror—Bankman-Fried’s counsel almost certainly had little choice in the matter. Their client has a famously idiosyncratic risk tolerance. And the case was not going well for the defense otherwise: Their cross-examinations, particularly of Ellison, hadn’t drawn much blood, and the judge denied a number of their proposed expert witnesses. So why not swing big?
In his direct examination, which began for the jury on Friday, Bankman-Fried got off to a steady start. When asked what his early vision was for FTX, SBF said that he had hoped to “move the [crypto] ecosystem forward,” but “it turned out basically the opposite of that.” (Shades of his “same, except exactly the opposite” quip to Ellison, which will live in ex-boyfriend infamy.) Bit by bit, he and his lawyers chipped away at some of the prior witnesses’ testimonies, trying to establish that mistakes were made and money was lost, but crimes were not intentionally committed.
To that point in the trial, the government had repeatedly offered evidence that Bankman-Fried is well-attuned to the best PR angles for him and his companies. As he sat on the stand, we in the courtroom could see the defendant strive to be perceived as forthright—and maybe also a little bit funny? Speaking about FTX’s decision to enter a 19-year, $135 million arena-naming deal with the city of Miami and the NBA’s Miami Heat, for example, Bankman-Fried unexpectedly and amiably roasted both Dak Prescott’s Sleep Number bed ad campaign (too unmemorable, per his analysis) and the Kansas City Royals (“With no offense to the Royals,” he said, talking about having considered working with the team on a possible stadium-naming deal, “I didn’t want to be known as the Kansas City Royals of crypto exchanges, so we passed on that one”). Honestly, some of it was solid material. A number of jurors grinned, maybe even chuckled a little, and so did I. And that was before he had this exchange with his lawyer, Mark Cohen:
Cohen: Can we turn to the second page, please? Pull up the paragraph entitled: “Things Sam Is Freaking Out About.” First entry is hedging. Do you recall discussing this with Ms. Ellison?
Bankman-Fried: Yes.
Cohen: Were you freaking out?
Bankman-Fried: I don’t tend to show a lot of freak-out-ness, but relative to my standard, yes.
Unlike the jurors, though, I was getting a kick out of this mainly because I had a good idea of what would be coming down the pike. Last Thursday, due to a dispute between lawyers about the admissibility of certain topics of inquiry, the jury was sent home early so that Bankman-Fried could offer limited testimony in a special “hearing” in front of Judge Kaplan (and the rest of the gallery). The direct questioning in that period had gone smoothly, much like it did in front of the jury—Sam’s father even gave him a big thumbs-up during a courtroom break.
But during a truncated cross-examination by Sassoon that afternoon, Bankman-Fried wilted. Simple questions like when …? or where …? or with whom …? gave him (and his mother, scoffing in the gallery) fits. The jury wasn’t there, so it was in some ways a dress rehearsal for both sides, but it went so resoundingly badly for the defense that I spent the night fretting that we’d come into court the next morning to find out that Bankman-Fried had run the numbers and would no longer testify at all. Luckily, that wasn’t the case.
When it came time for the real cross-examination, Bankman-Fried’s whole presence on the stand shifted. Gone was the strenuous (approaching affable) nerd who had described his college living situation as “coed, nerdy, and dry” and had explained to the jury why he’d been photographed carrying a deck of playing cards: not because he was a gambling man who wanted to be ready in case a poker game broke out, but rather to give his fidgety hands something to do. (It wasn’t a sustainable solution, he said: He shuffled the cards so often that he shredded through a pack of them a week at one point, and he had to switch to a fidget spinner.) Gone were the chatty asides about how most people strive for Inbox Zero, but his goal is Inbox 60,000. Bankman-Fried was now on the hot seat, and while he’d clearly learned since Thursday to keep his answers as close to “yep” and “nope” as possible, he still couldn’t help but veer into his own way.
In his direct testimony, Bankman-Fried had displayed a precise, expansive memory, but on cross, he had a much tougher time recollecting even the recent past:
Sassoon: You testified that you stumbled your way into Michael Kives’s Super Bowl party. Do you recall that?
Bankman-Fried: The seats at the actual, physical Super Bowl, yes.
Sassoon: And you flew to the Super Bowl in a private jet, didn’t you?
Bankman-Fried: I don’t remember.
Sassoon: You don’t recall flying to the Super Bowl in a private plane?
Bankman-Fried: I don’t recall how I got there.
Sassoon: Is that because you traveled on private planes so frequently?
Again and again, Sassoon asked him about specific statements he made, and he said he didn’t recall or didn’t know what she was referring to. Again and again, she came calmly with the receipts, posting Google Docs or old articles or video links or Signal messages. “Does that refresh your memory?” she would ask. “No,” he’d reply.
Sassoon [calling up a photo of SBF on a plane]: Mr. Bankman-Fried, is that you in shorts and a T-shirt on a private plane?
Bankman-Fried: Chartered plane, at least, yes.
Sassoon established that Bankman-Fried had bragged about being wholly separate from his trading firm, Alameda, but that he had also been directing trading activity—a big blow to his attempted defense that Ellison, the Alameda CEO, should have hedged better. She made Bankman-Fried read aloud a DM of his that said “fuck regulators” and had him admit that he had called some of the folks on crypto Twitter “dumb motherfuckers.” (Well, kind of admit: Bankman-Fried would agree that he had said that about only “a specific subset of them.”) She pulled up stock transfer agreements and wryly observed: “And this says, ‘Unanimous Consent of Board of Directors.’ Looking at the bottom, you were the only member of the board, correct?”
Once, cornered, Bankman-Fried piped up plaintively: “I can explain …” Sassoon wasn’t interested in that. “That’s all right,” she said, with the exact singsong cadence Miranda Priestly uses when dismissing an underling, as the exhibit monitor displayed all the explanatory proof she needed.
During the defense’s redirect on Tuesday morning, Bankman-Fried reverted to being a more eager talker and reminiscer. His memory became clearer when he was asked about past conversations and states of mind. He joked to the court about the photo of him on a private jet that the government had posted: “very flattering one.” Ha ha, I guess. But the whiplash in tone mostly served to make his reticent responses to the prosecutor’s earlier questions seem even more shady and petulant.
In Bankman-Fried’s time on the stand, the wide scope of his personality became clearer and clearer: how convincing and, in his way, winsome he could be; how cold and harsh he could become. Business in front; coed, nerdy, and dry in back. Still, while a lot of his chatter seemed designed to fill the air and distract the jury from the painful caesuras he’d endured from Sassoon, one thing he said came almost certainly from the heart.
Asked by Cohen why he had told Sassoon “no” under oath when asked if he had spent the missing $8 billion of FTX customer funds, Bankman-Fried had a couple of answers. One was, “Money is fungible anyway.” In other words: Hey, who’s to say?! But the other seemed to speak to one of Sam’s broader, odder points of view. “The other part of it, I mean, I don’t know if this is right or wrong, but for better or for worse, it has been a part of me that, like: I wasn’t particularly interested in trying to dole out blame for it. That wasn’t my priority. It generally wasn’t my priority. It was generally something I de-prioritized.”
This tracked with something his mother, a law school professor and ethicist, had written for the Boston Review a decade ago: a polemic against “blame mongering.” It also tracked with what Bankman-Fried had told Michael Lewis in the course of being interviewed for his book Going Infinite: that at his first job out of MIT, “Jane Street [Capital] really didn’t like blaming people. … They sort of asked, ‘Did anyone do anything contrary to what they were being told?’ When the answer was no, they said it could just as easily have been the CEO who did it.”
Later in Going Infinite, Bankman-Fried is quoted as saying, “Fault is just a construct of human society. It serves different purposes for different people. … I guess maybe the most important definition—to me, at least—is how did everyone’s actions reflect on the probability distribution of their future behavior?” In Bankman-Fried’s case, the record seems clear: His actions made him more likely, in the future, to behave as though there would be no consequences for them. His actions made him more likely, in the future, to repeat said actions. And his actions made him more likely, in the future, to arrive at a scenario where he would want to testify in federal court in his own defense in a multibillion-dollar fraud case.
On Thursday, a different construct of human society—the jury—will begin its deliberations on the seven counts of fraud, conspiracy, and money laundering leveled against Bankman-Fried. And they will ultimately be the ones to determine whether the fault lies with Bankman-Fried or if he’s not guilty of the charges against him. “He took the money. He knew it was wrong. He did it anyway,” Roos said in the government’s closing argument. “Because he thought he was smarter. … [He thought he could] talk his way out of it.” Cohen, speaking for the defense, told the jury, “The government has sought to turn Sam into some sort of villain, some sort of monster. … It’s both wrong and unfair.” Regardless of whom the jury believes, both sides are referring to the same missing billions, the same broken spreadsheets, the same defendant who sat up on the witness stand and made one thing really clear: that he’s forgotten so much more about all of this than we’ll ever be able to know.
