Sassoon and Bankman-Fried in Court: The Case of a Misleading Cryptocurrency Analyser
Sassoon moved on to a series of questions about whether Bankman-Fried recalled extremely specific things. Did he recall saying that FTX had reformed how crypto exchanges worked? That he had built a responsible system? That FTX was an exchange of thought. Did FTX provide clarity and transparency to the system?
The questions were followed up with evidence of Bankman-Fried publicly using the language Sassoon had offered. Several journalists were in the courthouse — some even in the courtroom — as their articles about Bankman-Fried were read aloud. It was obvious to everyone in the courtroom what was going on. Bankman- Fried did not recall anything.
Mr. Bankman-Fried’s testimony was the most anticipated moment of the trial, which has shined a spotlight on hubris and rampant risk-taking across the crypto industry. Mr. Bankman-Fried was once the face of the efforts to woo the public, but now he is compared to some of the worst fraudsters of all time.
Behind all the finance sheets and code bases, the fall of FTX was childish: a group of nerds ran away with a bunch of people’s money. I understand Bankman-Fried went to MIT and majored in physics and was a successful trader on Wall Street. He looked just like a child who broke a family heirloom and was trying to get his friends to do it.
But assason did not leave it there. The loss occurred because someone had exploited several loopholes on FTX in order to make the trade, she noted. I wondered if Bankman-Fried would tell investors about this exploit. He didn’t. Did he tell customers? Nope.
Once that was accomplished, Sassoon moved on to the meat of the cross. Bankman-Fried denied to customers and said that Alameda had some special privileges, which was featured in multiple statements from multiple interviews.
FTX Fall and Sassoon’s Cross-Examination: Sam Bankman-Fried and the Suppressed Reality of Trading Platforms
The fall of FTX was in a way incredibly childish: a nerd posse running away with a bunch of other people’s money in the stupidest and simplest way possible
Sassoon immediately followed this with direct messages Bankman-Fried had sent to Kelsey Piper, in which he said this was all just public relations, and “fuck regulators.”
He hadn’t made any of those statements under oath. Well… that remained true until we reached his Congressional testimony. Bankman-Fried read aloud testimony that he submitted to Congress about trading platforms’ obligations to maintain sufficient liquid assets. That platforms should ensure appropriate bookkeeping to prevent misuse of customer assets. Ensuring appropriate management of risks. There are conflicts of interest.
Bankman-Fried claimed to have been “not involved as a general principle in day to day trading,” but this turned out to depend highly on how one defines trading. Sassoon quickly introduced the “Vertex” Signal groupchat for discussing Alameda’s trading. In one of the messages, Bankman-Fried inquired how much of OXY and MAPS the group had bought. He suggested Alameda should spend $1 million to $2 million on each of the next few days. The definition of giving instructions varies, which is one of the reasons Bankman-Fried denied that it was him.
Then we got what I had been waiting for: the cross examination. The cross was not what Bankman-Fried testified to be. Sassoon was a matador in kitten heels, baiting Bankman-Fried before driving her sword through his shoulders.
The other task was figuring out how to explain the issue to the public. Assets are fine.” Don’t wait, send a twit. Bankman- Fried said he believed that at the time. On November 8th, Alameda was still solvent, he said. Almost all of the other events occurred exactly as others had described them, except that Bankman-Fried sounded more heroic in this telling, if only because he was not doing any crimes this time.
Midway through Sam Bankman-Fried’s cross examination, as prosecutor Danielle Sassoon went through a brutal line of questioning like a hot buzzsaw through a butter cow, I found myself reflecting on how smart the average person is. Maybe they don’t know calculus. Maybe they’ll never read Ulysses. Maybe they can’t code. They can identify bullshit when they see it.
Source: Sam Bankman-Fried doesn’t recall
Is It Your Testimony That You Were Going Through Trouble? Sam Bankman-Fried’s Cross-Examination with Mark Cohen
So if you, like Bankman-Fried, have moved into the Clintonian territory of “it depends on how you define ‘trading’’” you done fucked up, son. Even the stupid will see what you are saying, it is a sophisticated argument.
At various points during Sam Bankman-Fried’s cross examination, I saw jurors shake their heads, frown so hard their lips disappeared, and make prolonged eye contact with each other. The phrase “Is it your testimony that…” has become a fear topic for me.
The day wasn’t actually a disaster. The strongest testimony he has given so far is the one Bankman-Fried gave. Even if Mark Cohen had once instructed us to go back in time to November 7th, he has been able to order a simple chronological narrative thanks to his home territory of direct examination.
But Bankman-Fried’s recounting of events was supported by very little other evidence. Gary Wang, Caroline Ellison, and Nishad Singh all had text messages, documents, code snippets, and so on to corroborate their versions of events. Bankman-Fried’s testimony had very little of that, and what little it did have was pretty thin.