On Monday morning, Sam Bankman-Fried (SBF) continued his testimony in Manhattan federal court, facing grilling questions from the prosecution. The defense had already finished their direct examination earlier, leading to Bankman-Fried’s cross-examination conducted by US Assistant Attorney Danielle Sassoon.
The Importance of Direct Answers
Sassoon wasted no time in pushing Bankman-Fried to give direct answers to the questions presented. She focused on statements that Bankman-Fried had made to the public and media. In particular, she highlighted tweets where Bankman-Fried claimed that FTX was the “most regulated crypto exchange by far” and emphasized that “funds and safety come first” on the platform. Bankman-Fried also stated in November 2022 that Alameda played by the same rules as everyone else. However, these statements were later contradicted when Bankman-Fried’s crypto empire collapsed, raising doubts about the credibility of his previous claims.
Judge Kaplan even intervened at times, reminding Bankman-Fried to answer the questions adequately. Sassoon questioned Bankman-Fried about the relationship between FTX and its sister company, Alameda Research, causing him to hesitate. When asked if he was involved in Alameda’s trading in 2022, Bankman-Fried responded, “It depends on how you define trading.”
The Contradictions Revealed
During the cross-examination, Bankman-Fried was confronted with Twitter messages he had sent to journalist Kelsey Piper in November 2022. In these messages, he admitted that much of what he said regarding regulation was “just PR.” This stunning revelation was followed by another message where Bankman-Fried expressed disdain for regulators. Sassoon pointed out that Bankman-Fried used Twitter to communicate with users and potential customers, referring to them as a subset of “dumb motherf-ckers” in a private conversation.
Sassoon also focused on Bankman-Fried’s earlier testimony before Congress, where he claimed that users had “refunded collateral deposits instead of credit extensions” on the exchange. However, the prosecution highlighted that Alameda’s account on FTX was given a $65 billion line of credit, a fact that was never disclosed to customers or the public. Bankman-Fried had previously asserted in an interview with Bloomberg that FTX and Alameda were “wholly separate entities,” further raising questions about the transparency of his operations.
Bankman-Fried’s cross-examination will continue this afternoon, as the prosecution continues to probe deeper into the evidence and contradictions surrounding his business practices.
