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Prosecutor takes aim at Sam Bankman-Fried’s credibility at trial of FTX founder

Assistant US attorney confronted Bankman-Fried with instances in which he’d promised customers that their assets would be safe and that they could demand those assets to be returned at any time

FTX founder Sam Bankman-Fried
FTX founder Sam Bankman-Fried is questioned by prosecutor Danielle Sassoon during his fraud trial in New York City, U.S., October 30, 2023.JANE ROSENBERG (REUTERS)

A prosecutor began cross-examining Sam Bankman-Fried at a New York City trial on Monday, attacking his credibility by highlighting public statements he made before and after the FTX cryptocurrency exchange he founded filed for bankruptcy late last year when it could no longer process billions of dollars in withdrawals.

Assistant U.S. Attorney Danielle Sassoon confronted Bankman-Fried with instances in which he’d promised customers that their assets would be safe and that they could demand those assets to be returned at any time. Repeatedly, Bankman-Fried answered the series of questions with a rapid “Yep.”

Bankman-Fried, 31, has been on trial for the past month on charges that he defrauded his customers and investors of billions of dollars. He has pleaded not guilty to charges that carry a potential penalty of decades in prison.

The California man gained a level of fame from 2017 to 2022 as he created the Alameda Research hedge fund and FTX, building a cryptocurrency empire that became worth tens of billions of dollars. For a time, he seemed to be transforming the emerging industry by conforming to his publicly stated vision of a more regulated and safe environment for users.

Through her line of questioning, Sassoon tried to show that Bankman-Fried’s public statements were false and that he promised customers that their accounts were safe while he looted them, spending lavishly on real estate, celebrity-laden promotions, investments and political contributions.

In one instance, she asked him if he’d used profanity in speaking about regulators — even as he was trying to convince Congress to bring more legitimacy to the cryptocurrency industry by setting up a regulatory framework.

“I said that once,” he answered when she offered a specific example. And when Sassoon asked if his pursuit of regulations was just an attempt at garnering positive public relations, he answered: “I said something related to that, yes.”

Before cross-examination began on Monday, Bankman-Fried testified that he believed his companies could withstand the daily withdrawal of billions of dollars in assets until several days before they could not.

Bankman-Fried was arrested last December on fraud charges. Initially freed on a $250 million personal recognizance bond to live with his parents in Palo Alto, California, he was jailed in August when Judge Lewis A. Kaplan became convinced that he had tried to tamper with potential trial witnesses. He began testifying on Thursday. Kaplan has told jurors that the trial might be completed as early as this week.

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