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Sam Bankman-Fried takes big risk with court testimony

JUANA SUMMERS, HOST:

The disgraced crypto mogul Sam Bankman-Fried is known for taking risks, and today he took a big one when he took the stand today in his own defense. It is a Hail Mary attempt to convince the jury that he's innocent and not the person who committed one of the biggest financial frauds in history. NPR's David Gura joins us now from outside the federal courthouse in Manhattan. So David, tell us, what was it like in court today?

DAVID GURA, BYLINE: Well, Sam Bankman-Fried took the stand wearing a gray suit, and he spent the day fielding questions from his lead defense attorney, Mark Cohen. Of course, this was not adversarial, so it went pretty smoothly. Bankman-Fried seemed pretty relaxed on the stand. He's accused of orchestrating a massive fraud involving these two companies, of funneling customer money from what was one of the largest cryptocurrency exchanges in the world into Alameda Research, his crypto trading fund, and spending that money on investments and high-end real estate and paying down billions of dollars in debt. So right off the bat, Cohen asked him, did you defraud anyone? And Bankman-Fried said, no, I did not. As his testimony went on, his answers became longer and more winding, to the apparent frustration of the judge, who at one point instructed Bankman-Fried to listen more closely to the questions and to answer them more narrowly.

SUMMERS: All right then. Give us the highlights. What was the gist of his testimony today?

GURA: Well, two things. Sam Bankman-Fried maintained this was not his fault. He made some mistakes, but he didn't intend to defraud anyone or commit any crimes. And he blamed some of his former top lieutenants, several of whom testified against him as cooperating witnesses. Bankman-Fried said he was too busy to track what those executives were doing. And he addressed some explosive testimony by the government's star witness.

Last week, Caroline Ellison, who ran Alameda Research, that crypto trading firm, who's also his ex-girlfriend, said Bankman-Fried directed her to commit crimes. Well, today he turned the tables and said she was a poor manager and the implosion of both Alameda Research and FTX was her fault. Bankman-Fried told the court the biggest mistake he made was not hiring a risk officer - FTX didn't have one. We sure should have, he said.

SUMMERS: I know you've been following the story for a while now, and it sounds like today really stood out in this trial. Did it?

GURA: Yeah. It was a wild scene, incredibly crowded here, the busiest I've seen it since the trial started about three weeks ago. Reporters were lining up outside the building at midnight to get a seat, and as the hours went by, they were joined by investors and lawyers, people who have ties to this case, a few dozen curious onlookers, people who seemed to recognize this is, without question, a pivotal moment in this trial. Michael Lewis, the author, has been here. He's written a book about Sam Bankman-Fried, and he got in line shortly after I did - I should say, not at midnight, for the record.

(LAUGHTER)

GURA: I have seen him signing copies of that book in the courthouse. And I don't know if you're a fan, Juana, but the actor Ben McKenzie, who starred in "The O.C." and...

SUMMERS: Wow.

GURA: ...The show "Gotham." Now a very outspoken crypto skeptic, he's got a book of his own. Ben McKenzie was here as well.

SUMMERS: OK. So David, what happens next in this case?

GURA: Well, the fireworks are expected to start on Monday, when the prosecution begins its cross-examination of Sam Bankman-Fried. And, of course, this is the riskiest part of a defendant taking the stand in his own trial. Now, we've gotten a glimpse of how fiery that testimony is likely to be. On Thursday, there was an initial hearing with just the judge, Bankman-Fried's lawyers and the prosecutors. The jury wasn't there. This was to hash out what we can see admitted in court. Danielle Sassoon, the lead prosecutor, who is also a former Supreme Court clerk, cross-examined Bankman-Fried, and she was extremely effective. It was evident her tough questions made the defendant uncomfortable. He had trouble remembering meetings, remembering conversations. It was another time when the judge admonished the defendant. At the end of today's proceedings, she told the judge she expects significant cross-examination that will start on Monday.

SUMMERS: NPR's David Gura outside the federal courthouse in Lower Manhattan. David, thank you.

GURA: Thanks, Juana. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

David Gura
Based in New York, David Gura is a correspondent on NPR's business desk. His stories are broadcast on NPR's newsmagazines, All Things Considered, Morning Edition and Weekend Edition, and he regularly guest hosts 1A, a co-production of NPR and WAMU.