Sam Bankman-Fried jury to hear FTX founder’s testimony in fraud trial

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NEW YORK – Sam Bankman-Fried is expected to take the stand on Friday at his fraud trial in New York on charges of looting billions of dollars in customer funds from his now-bankrupt FTX cryptocurrency exchange. His testimony is set to mark the first time the 12 jurors and five alternates are hearing directly from the 31-year-old former billionaire after 12 trial days. Bankman-Fried started testifying on Wednesday at an unusual hearing outside the jury’s presence. U.S. District Judge Lewis Kaplan asked him to preview his testimony about the involvement of lawyers in key decisions at the heart of the case so he could decide whether it was admissible as evidence. Prosecutors accuse Bankman-Fried of using FTX customer funds to prop up his crypto-focused hedge fund, Alameda Research, make speculative venture investments and donate more than $100 million to U.S. political campaigns. He also faces charges of scheming to cheat Alameda’s lenders and FTX investors. Bankman-Fried’s trial, which began on Oct. 3, is drawing to a close nearly a year after FTX collapsed amid a wave of customer withdrawals. The company declared bankruptcy in November 2022 and Bankman-Fried was indicted the following month. Bankman-Fried said during questioning from defense lawyer Mark Cohen that FTX’s lawyers were involved in crafting its document-retention policies, setting up a system under which FTX customers deposited their funds into an Alameda bank account, and crafting loans that he and other executives took from Alameda. On cross examination, Bankman-Fried, whose parents are both professors at Stanford Law School, rocked sided to side and often hedged his answers. “I’m going to answer what I think the question you are asking is but I apologize if I am answering the wrong question,” Bankman-Fried said at one point. Kaplan remarked during the hearing that Bankman-Fried had “an interesting way of responding to questions.” Bankman-Fried said he believed Alameda was permitted to borrow from FTX in certain circumstances, but pushed back against the idea that he was using customer assets for his own purposes. “That is not what I viewed to be happening so that is certainly not how I discussed it with attorneys,” he said when asked whether he had discussed using FTX customer assets to buy rival exchange Binance’s stake in FTX. Kaplan said he would rule in the morning on whether Bankman-Fried can tell the jury about his interactions with lawyers.

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