Sam Bankman-Fried Is a Terrible Client


Within the weeks after Sam Bankman-Fried’s FTX crypto alternate started to crumble final November, he selected to disregard essentially the most fundamental piece of authorized recommendation: Say nothing, or danger incriminating your self. He took media interviews. He appeared on podcasts. He tweeted incessantly. He started his own Substack. He promised to testify in entrance of Congress, although he was arrested earlier than he obtained the prospect.

Beginning at present, Bankman-Fried will stand trial in a New York court docket, accused of seven separate counts of fraud towards prospects, buyers, and lenders. FTX collapsed after customers tried to withdraw their cash from the alternate however have been unable to as a result of, the Division of Justice alleges, Bankman-Fried had funneled the cash right into a sibling enterprise, Alameda Analysis, the place it was spent on high-risk crypto trades, debt repayments, private loans, luxurious purchases, and different firm bills.

The trial, whose final result will imply little for crypto companies or the individuals who misplaced cash in FTX, has already garnered loads of public consideration. The prosecution’s witnesses will embody victims of the alternate’s collapse and Bankman-Fried’s one-time paramour, former Alameda CEO Caroline Ellison. It might appear intuitive that Bankman-Fried, the protagonist, ought to have a talking function. However his legal professionals may nicely advise him to plead the Fifth Modification and decline to testify.

In his public appearances earlier than his arrest, Bankman-Fried characterised the state of affairs as one huge mistake. There was negligence, he admits, however no prison intent to defraud. However his makes an attempt to elucidate away the allegations may create complications for his authorized crew in court docket. Because the protection, the target is to “create an immaculate narrative,” says Jason Allegrante, chief authorized officer at crypto custody agency Fireblocks, to “current the very best narrative the information will assist.” However when Bankman-Fried started “defending himself within the media and court docket of public opinion,” he risked “introducing into the general public document loads of data and materials that can be utilized towards him.”

Because the trial progresses, Bankman-Fried’s protection crew might want to take those self same dangers into consideration in deciding who to put on the stand.

Bankman-Fried’s trial will final 4 to 6 weeks. First, the prosecution will lay out its case, calling all its witnesses—from FTX prospects to buyers to alleged “coconspirators.” Then the protection will select learn how to reply. Beneath the US justice system, the prosecution should show guilt past an affordable doubt. Due to this fact, a viable protection technique, says Jordan Estes, associate at regulation agency Kramer Levin, is to “simply poke holes within the authorities’s case” and decline to supply up any further witnesses.

Whether or not Bankman-Fried takes the stand or not will solely be determined, says Estes, as soon as the power of the prosecution’s case turns into clear. He’s in no way required to testify. “It’s his determination. We’ll simply have to attend and see,” she says. “If the federal government’s case isn’t going nicely—in the event that they name witnesses that don’t seem very credible or the cross-examination goes terribly—there’s a risk the protection will really feel it doesn’t must do something.”

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