Bankman-Fried is facing seven charges of fraud, money laundering and conspiracy.
Since the trial began in early October, the government’s cooperating witnesses have included former FTX and Alameda executives, including Bankman-Fried’s former romantic partner and Alameda CEO, Caroline Ellison. Testimony from prosecution witnesses has painted a picture of rampant fraud and mishandling of billions of dollars in customer deposits, which they allege were spent on luxury real estate, dark-money political donations and risky investments.
Bankman-Fried’s testimony, which comes amid diminishing expectations of a not-guilty verdict, amounts to a high-stakes gamble, former federal prosecutors tracking his trial say.
After weeks of damaging testimony from his top lieutenants, who consistently depicted the defendant as the architect of a massive fraud, Bankman-Fried will have a chance to offer jurors a different story. But after friendly questioning from his own lawyers, he will face cross-examination by prosecutors primed to make him answer for both the witness and documentary evidence that he knowingly stole billions in customer funds.
“I just don’t know how he can explain his way out of the testimony that’s preceded his taking the stand,” Daniel Silva, a former federal prosecutor focused on financial crimes, said in a recent interview.
Taking the stand nevertheless may present Bankman-Fried’s last, best hope to sway jurors, former government lawyers said.
“Given that Bankman-Fried is losing this trial badly, taking the stand is a Hail Mary of sorts,” said Renato Mariotti, a former federal prosecutor focused on financial crime. “Unfortunately for [him], he may be down by more than a touchdown.”
Bankman-Fried’s defense team had already signaled earlier this month that the former executive could take the stand, when Cohen wrote Kaplan requesting help securing Bankman-Fried’s prescribed dosage of Adderall. Bankman-Fried’s lawyers had complained about their client’s lack of access to the attention-deficit treatment after he was jailed in August, when Kaplan revoked his bail. Then, on Oct. 15, Cohen wrote that the defendant needed the medication as the defense weighed “the critical decision of whether Mr. Bankman-Fried will testify.”
Bankman-Fried subsequently has received his full dosage.
As he prepares to take the stand, Bankman-Fried will probably emphasize his state of mind as he guided his crypto empire through its explosive growth and stunning collapse, rather than offer a point-by-point refutation of the prosecution’s case, legal experts say.
“His team has likely made an assessment that a jury might believe him when he says he didn’t mean to do anything wrong,” said Andrew George, a white-collar criminal defense lawyer at Baker Botts.
Bankman-Fried’s decidedly unpolished presentation could be a key asset as he tries to convince jurors of his credibility, George added.
Yet Bankman-Fried’s own efforts to explain himself publicly — like his whirlwind press tour in the wake of FTX’s collapse late last year — have also created a legal minefield for him, Mariotti said, noting the defendant “will be totally hemmed in by his prior statements.”
“If he changes what he says now, the government can introduce them to the jury to say he’s been inconsistent and was either lying to the press then or to the jury now,” Mariotti said. “And either way, he’s lying.”
