Former cryptocurrency expert Sam Bankman-Fried was prodded from the start of his cross-examination on Monday in his federal trial in New York, with prosecutors listing his contradictions one by one.
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During the “SBF” hearing that began last week, his attorney, Mark Cohen, had patiently tried to project, through his questions and his client’s answers, the image of a good faith business owner making sensible decisions without criminal intent.
But Danielle Sassoon, representing Brooklyn federal prosecutor Damian Williams, reportedly tried from the first minutes of cross-examination to tear apart that line of defense built during the seven-hour hearing Friday and Monday.
She questioned the defendant about a number of public statements and, each time, about the discrepancy between these and the actual situation or functioning of his companies.
“SBF” is on trial for organizing, without the knowledge of customers, the illegal use of funds deposited on its cryptocurrency exchange platform FTX, which went bankrupt in November 2022.
The money pumped into FTX fueled the often risky activities of its investment company Alameda Research.
In several interviews he gave after the failure of FTX, Sam Bankman-Fried explained that long before the bankruptcy he distanced himself from the management of Alameda, of which he remained the majority shareholder, to avoid conflicts of interest.
“Overall, I did not make any decisions regarding the Alameda transactions, but I was not completely cut off from these operations,” but admitted on Monday that the man could face up to 110 years in prison if convicted.
The prosecutor also cited several statements and tweets claiming that protecting customer and investor funds was a “priority” because Alameda had taken in up to $14 billion in customer deposits, often to conduct high-risk transactions.
“I don’t remember exactly,” “I’m not sure,” the defendant said tirelessly. As a counterpoint, each time Danielle Sassoon produced a document containing a damning statement or piece of writing.
The prosecutor also mentioned Sam Bankman-Fried’s numerous interventions in Congress (three times) in which he advocated for greater regulation of the cryptocurrency sector.
“Did you say screw the regulators?” asked Danielle Sassoon, ready to produce a new document to prove it. “I said it once.”
The indictment also detailed a series of public claims by “SBF” that Alameda “did not have privileged access” to FTX.
Still under fire from the prosecutor’s questions, “SBF” nevertheless acknowledged that Alameda had a credit line of up to $65 billion, an amount that made it exceptional on the platform.
The former digital currency idol also confirmed that, unlike all of FTX’s other customers, Alameda was allowed to have a negative balance that exceeded the value of all of his collateral without exposing himself to the closure of his account.