December 8, 2023

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Sam Bankman Fried prepares to testify in a fraud trial

Sam Bankman Fried prepares to testify in a fraud trial

Sam Bankman-Fried, the founder of failed cryptocurrency exchange FTX, plans to testify at his criminal fraud trial in Manhattan, his lawyer said today.

Attorney Mark Cohen confirmed Mr. Bankman-Fried’s plans to stand as a witness at a hearing with prosecutors and the judge overseeing the case, which was held on the last day of the trial’s nearly weeklong break. Mr. Bankman-Fried, 31, is likely to begin giving evidence on Thursday, after federal prosecutors call their final witness in the morning.

“Our client will testify,” Mr. Cohen said at the hearing.

Mr. Bankman-Fried is charged with organizing a massive scheme to steal up to $10 billion in deposits from FTX clients. Prosecutors say the cryptocurrency mogul diverted the money into political contributions, real estate purchases and other lavish spending.

Mr Bankman-Fried has pleaded not guilty to seven counts of fraud, conspiracy and money laundering. If convicted, he could face up to life in prison.

During the first three weeks of the trial, prosecutors called Mr. Bankman-Fried’s close friends and colleagues, who testified that the FTX founder lied to clients, investors and lenders about the exchange’s use of client funds.

At Wednesday’s hearing, Mr. Cohen said the defense was planning to call three witnesses in addition to Mr. Bankman-Fried. One is Joseph Pimbley, a financial services consultant, who is expected to testify about the finances of FTX and Alameda Research, a cryptocurrency trading firm that has borrowed billions of dollars from FTX clients. Mr. Bankman-Fried founded Alameda before starting FTX.

Mr. Cohen also plans to contact a Bahamian lawyer who was involved in Mr. Bankman-Fried’s case, as well as an expert in maintaining corporate records.

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Mr. Bankman-Fried is expected to testify after these witnesses.

Weeks after FTX collapsed in November, Mr. Bankman-Fried was arrested in his penthouse apartment in the Bahamas, where the exchange was based. He was then extradited to the United States and placed under house arrest at his parents’ home in Northern California. In August, his bail was revoked after a judge ruled that he had tried to intimidate witnesses.

During the trial, Mr. Bankman-Fried spent his nights at the Metropolitan Detention Center in Brooklyn, where his lawyers say he had only sporadic access to computer files he needed to prepare for trial. In August, lawyers said Bankman-Fried, a vegetarian, was subsisting on a diet of bread, water and peanut butter.

Mr. Bankman-Fried appeared in court each day of the trial, which began this month, wearing a suit purchased at a Macy’s discount store. His parents, Stanford law professors Joe Bankman and Barbara Freed, watched from the gallery, along with other powerful legal figures, including Damien Williams, the top federal prosecutor in Manhattan.