The prosecution in Sam Bankman-Fried’s landmark fraud case revealed several telling messages the fallen crypto founder had via direct message through Twitter. The prosecution called investigative analyst for the Southern District of New York, Shamel Medrano, to the witness stand, where he was presented with a number of incriminating messages Bankman-Fried wrote to Vox journalist, Kelsey Piper, on Twitter shortly after FTX collapsed.
Unethical Actions for the Greater Good?
In one particular message, Piper brought up a conversation she had with the now disgraced FTX founder on whether one should do unethical things for the greater good. Bankman-Fried replied that it was not worth it before admitting to making dumb statements that were not true. He expressed remorse for those who were affected by his actions, saying, “I feel bad for those who get f-cked by it.” This exchange sheds light on Bankman-Fried’s mindset and questionable decision-making.
Lack of Regulation and Regret
Bankman-Fried also discussed the lack of regulation in the cryptocurrency industry with Piper, expressing frustration about the absence of individuals who could bring positive change or prevent negative outcomes. He further claimed that his involvement in the regulatory sphere was merely for public relations purposes, exclaiming, “F-ck regulators.” These statements reveal Bankman-Fried’s disdain for regulatory efforts and raise concerns about his commitment to ethical practices.
“Gary is scared, Nishad is ashamed and guilty,” Bankman-Fried shared in one message when discussing the reactions of FTX co-founder, Gary Wang, and FTX’s head of engineering, Nishad Singh, to the company’s demise. When asked if Singh’s guilt was related to the loss of customer deposits, Bankman-Fried affirmed it. These revelations highlight the emotional toll the collapse had on individuals within the company.
Bankman-Fried’s attempts to suppress the information became apparent when he asked Piper to take down the story, believing he had not been recorded. These actions demonstrate Bankman-Fried’s awareness of the potential damaging impact of his statements and his desire to control the narrative.
As the trial continued, defense lawyers had the opportunity to cross-examine accounting professor Peter Easton and FBI forensic accountant Paige Owens, both of whom provided insights that supported the defense’s case. Easton claimed that the funds in Alameda Research and FTX’s accounts were significantly less than their liabilities to customers, suggesting that customer funds were misused. However, the defense challenged Easton’s calculations by pointing out an omission of FTX customer accounts.
Owens’ use of the “last in first out” accounting method was also dissected by the defense, who argued that its application could yield varying results. The defense even pointed out a potential error in Owens’ analysis, further undermining the prosecution’s case. These exchanges during the trial added to the doubt surrounding the allegations against Bankman-Fried.
Judge Lewis Kaplan’s intervention in the proceedings intensified the courtroom tension. He scolded both the prosecution and defense for their inadequate examination of witness Cory Gaddis, a records custodian for Google. Judge Kaplan deemed Gaddis’ presence unnecessary and criticized the counsels’ decision, stating it was “just unreasonable.” He emphasized his expectation of better conduct from them going forward.
The trial will reconvene on Thursday, October 19th, following a break for the week.
