Collapsed crypto exchange founder in court Thursday

Sam Bankman-Fried’s testimony in a New York courtroom Thursday will be the latest must-see moment in the high-profile fraud trial over the collapse of his FTX crypto exchange.

The 31-year-old Bankman-Fried’s decision to take the stand was questioned by defense lawyers, but may be his only chance to win over jurors after weeks of damaging testimony from his former friends and colleagues.

The once respected crypto mogul is facing decades in prison on charges that he directed the transfer of FTX customer money into Alameda Research, an affiliated hedge fund, for risky investments, political donations and expensive real estate before both companies spiraled into bankruptcy last year. 

“He couldn’t stop talking to press and wider world after FTX collapsed and before he was arrested and then while out on bail so no one should be surprised that he is choosing to take the stand,” said Brian Klein, a former federal prosecutor. 

The highlight of the trial so far has been the testimony of Caroline Ellison, Bankman-Fried’s former girlfriend who he installed as CEO of Alameda. The 28-year-old Ellison told jurors that Bankman-Fried orchestrated a fraud at FTX, which included directing her to create a set of alternative balance sheets to obscure billions of dollars borrowed from the exchange’s customers.

Ellison commanded the attention of jurors and spectators when she talked about the end of Bankman-Fried’s empire, testifying through tears: “That was overall the worst week of my life.”

Caroline Ellison, former chief executive officer of Alameda Research LLC, center, exits court in New York, US, on Thursday, Oct. 12, 2023. Ellison, ex-girlfriend of FTX co-founder Sam Bankman-Fried, outlined for a New York jury Wednesday how she worked with Sam Bankman-Fried to deceive lenders and customers to build his multi-billion dollar cryptocurrency empire, and their failed attempts to prevent a spectacular collapse. Photographer: Stephanie Keith/Bloomberg

While the testimony will be pivotal for Bankman-Fried and his lawyers, it will also be a big moment for the dozens of court watchers who line up outside the court for one of the handful of seats reserved for the public. 

Tiffany Fong, a crypto influencer who’s been to the trial every day, said she hopes to get up at 4 a.m. Thursday morning and turn up at the court by 5 to ensure she gets a seat.

“I really want to be in the main courtroom for this,” said Fong, who visited Bankman-Fried a few times during his house arrest in California. “Some people have told me they are gonna go at 6 a.m. or 7 a.m. I feel like that could potentially be too late.”

To get to the Bankman-Fried trial these days, spectators have to negotiate security barriers, swarms of cops and a battalion of satellite trucks focused on the $250 million civil fraud trial of Donald Trump, next door in state court. 

Bankman-Fried had to sit through the testimony of former friends and colleagues including, Adam Yedidia, a former FTX coder and college friend, Gary Wang, another friend from MIT who co-founded FTX, and Nishad Singh, FTX’s former engineering director.

After those witnesses, Bankman-Fried’s testimony will be “rearranging the deck chairs on the Titanic,” Klein said. 

A defendant who takes the stand in a criminal case risks damaging cross-examination from prosecutors. Bankman-Fried has nonetheless decided to persuade the jury that his version of FTX’s collapse is true.

He’s expected to be on the stand for at least a full day, with closing statements and the start of jury deliberations likely next week.

“This is definitely like the climax of the movie,” Fong said. “I don’t even know what to expect.”