United States: the former king of cryptocurrencies heckled during his cross-examination

Former cryptocurrencies figure Sam Bankman-Fried, on trial at New York, was jostled during his cross-examination on Monday, the prosecution made one point at another; one of its contradictions.

During the “SBF” hearing which began the previous week, his lawyer Mark Cohen had patiently sought to present, through his questions and his client's responses, an entrepreneur in good faith, making sensible decisions, without criminal intent.

But Danielle Sassoon, representative of Brooklyn federal prosecutor Damian Williams, ostensibly sought, from the first minutes of the cross-examination, to tear apart this line of defense assembled during seven hours of hearing on Friday and Monday.

She questioned the accused about a series of public statements and, each time, about the gap between them and the actual situation or functioning of his companies.

“SBF ” is on trial for having organized, without the knowledge of clients, 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 his investment company Alameda Research.

In several interviews, given after the failure of FTX, Sam Bankman-Fried explained that he had distanced himself , long before the bankruptcy, with the management of Alameda, of which he remained the majority shareholder, to avoid any conflict of interest.

“Overall, I did not make decisions on the Alameda transactions, but I was not completely cut off from these operations,” nevertheless admitted Monday the man who faces up to 110 years in prison if convicted .

– Small arrangements –

Since the opening of the trial, three key witnesses – former collaborators – have affirmed that “SBF” was perfectly informed of the financial situation of the company and had done nothing to change its trajectory.

FTX founder Sam Bankman-Fried upon his arrival at New York federal court on March 30, 2023 © AFP – Ed JONES

The prosecutor's representative also mentioned on Monday several statements and tweets asserting that protection Customer and investor funds were a “priority,” as Alameda borrowed up to $14 billion in customer deposits, often to make high-risk transactions.

“I don’t remember exactly,” “I’m not sure,” the accused said tirelessly. Each time, Danielle Sassoon produced, in counterpoint, a document containing a damning statement or writing.

“SBF” was, moreover, taken up on multiple occasions by federal judge Lewis Kaplan for digressions and imprecise answers.

The young thirty-year-old questioned, on several occasions, comments attributed to him in several articles, even if the statements were consistent from one publication to another.

The prosecutor also mentioned the numerous interventions by Sam Bankman-Fried in Congress (three times), during which he campaigned for more regulation of the cryptocurrency sector.

“Did you say: fuck the regulators?” , however, questioned Danielle Sassoon, ready to draw out a new document demonstrating it. “I said it once.”

The prosecution also detailed a series of public assertions by “SBF” according to which Alameda had “no privileged access” to FTX.

Still under fire from the prosecutor's questions, “SBF” nevertheless recognized that Alameda benefited from a credit line of up to $65 billion, an amount that made it an exception on the platform.

The former idol of digital currencies also confirmed that Alameda was allowed to have a negative balance without providing guarantees to FTX and could use the borrowed money elsewhere than on the platform, unlike all other clients.

Through his questioning, Danielle Sassoon also sought to highlight the accused's perception of risk, including consciously allowing Alameda's financial situation to deteriorate.

After questioning the lawyers and the prosecution , Judge Kaplan estimated that the witness could still be questioned for most of the day on Tuesday.

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