Bankman-Fried vs. Sassoon: How to Teach the Public How to Get to the Bottom of the Debacle
A series of questions was posed about whether Bankman- Fried recalled specific things. Did he ever say that FTX reformed the work of the exchanges? Is that the system he built was responsible? Is that FTX a thoughtful exchange? Was it FTX that was giving clarity and transparency to the system?
Bankman- Fried said a spoiled child did not get the biggest scoop of ice cream at his birthday party. He wanted to answer his own questions, which he liked better than answering the prosecutor’s questions. He often replied to yes-or-no questions with nonsense.
The most anticipated moment of the trial was the testimony of Mr. Bankman-Fried, which shined a spotlight on arrogance and rampant risk-taking in the industry. Mr. Bankman-Fried is now seen as an example of how to cheat the public, rather than a face of the efforts to woo them.
We were introduced to a document where Bankman-Fried listed his priorities, including: “getting accounting right on FTX.” Cohen and Bankman-Fried used this to show how devoted Bankman- Fried was to getting to the bottom of the debacle with Alameda’s money. It was expected that FTX’s revenue and expenses would be shown in real time, where their bank accounts were, and what investor money it had. It was found out that getting accounting right was the priority of Bankman-Fried.
But Sasson did not leave it there. She said that someone had exploited several loopholes on FTX to make the trade. Did Bankman-Fried tell anyone about the exploit? He didn’t. Did he tell people? Nope.
Once that was accomplished, Sassoon moved on to the meat of the cross. Bankman-Fried had denied to customers that Alameda had special privileges, but several statements from multiple interviews show that’s not the case.
Sam Bankman-Fried Didn’t Run Away: The Censorship of Financial Times, the Financial Times & Sassoon
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
Bankman-Fried sent a direct message to Piper that said this was all about public relations and fuck regulators.
Still, he hadn’t made any of those statements under legal oath, had he? That was true until we heard his congressional testimony. Bankman- Fried had told Congress that trading platforms had an obligation to maintain sufficient liquid assets. Appropriate bookkeeping should be done by platforms to prevent misuse of customer assets. Ensuring proper management of risks. Conflicts of interest are avoided.
We also saw Bankman-Fried giving directions on Japanese government bonds. Bankman-Fried just testified about telling Ellison how to hedge his bets. Bankman-Fried told us he wasn’t involved in trading and hadn’t been for years at Alameda. “I was intentionally not getting involved in it” because of possible conflicts of interest. Bankman-Fried told the Financial Times that he had walled himself off from trading.
Then we got what I had been waiting for: the cross examination. The cross was not a joke, even though Bankman-Fried’s direct testimony was short. Sassoon baited Bankman-Fried with her sword, then drove her sword through his shoulders.
Bankman-Fried was trying to figure out how to explain to people thatFTX is fine. Assets are fine.” Get in touch with us via the Tweets. According to Bankman-Fried, he really believed that at the time. He said that Alameda was solvent on November 8th. Most of the events happened the way others had described them, but only Bankman-Fried sounded more heroic because he wasn’t doing any crimes this time.
I thought about how smart the average person is as Danielle Sassoon was questioning Sam Bankman- Fried. Maybe they don’t know how to work with it. Maybe they’ll never read Ulysses. They may not be able to code. They can identify bullshit when they see it.
Source: Sam Bankman-Fried doesn’t recall
What Is Your Testimony? Sam Bankman-Fried in a Cross-Examination on November 7th, 2001, Revisited
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. The stupid will see through the argument you make.
At various times during Sam Bankman-Fried’s crossexamination, I saw jurors shake their heads, scowl and make eye contact with each other. I now have a fear response to the phrase “Is it your testimony that…”
The day did not start as an actual disaster. In fact, Bankman-Fried’s direct testimony was the strongest he’d given so far: clear, coherent, believable. Mark Cohen was able to order a simple narrative even though he once instructed us to go ahead with the trial before November 7th.
Bankman-Fried had very little other evidence to back up his story. Text messages, documents, code snippets, and so on corroborate the accounts of Gary Wang and other people. Bankman-Fried’s testimony had very little of that, and what little it did have was pretty thin.
Taking the stand was always going to be a risky move — one few criminal defendants make. It was clear why from the outset of the prosecution cross-examination.
Danielle Sassoon, the Finsbury-Fried Corporation, and the Successes of Hexagon, a Collapsing Company
The stakes are high for Bankman-Fried. He’s been charged with seven criminal counts, including securities fraud, and if he is found guilty, he could spend the rest of his life in prison.
Danielle Sassoon was a former clerk to the late Justice Antonin Scalia, and she is known to be an effective litigator.
For almost eight hours, the assistant U.S. Attorney for the Southern District of New York asked Bankman-Fried a litany of incisive questions. She moved quickly, and whenever the defendant hesitated, she dug in.
And with each passing hour, Bankman-Fried seemed to get more and more irritated. He disagreed with how Sassoon characterized his past comments in trial testimony.
At times, he seemed too sad to be true. When the prosecutor asked Bankman-Fried to read his previous statements, he was reluctant to do so.
Bankman-Fried was indicted and he did media interviews after his companies collapsed. He said that X was formerly known as TWITTER. He had a desire to start his own newsletter.
Sassoon’s goal was to demolish Bankman-Fried’s claims that he was someone who simply struggled to keep up with the speed and magnitude of FTX’s growth, and failed to recognize the extent of its troubles — including the misuse of FTX customer money.
Above all, Sassoon was prepared. When Bankman-Fried said that he couldn’t remember, she would use an email, a text or an excerpt from an interview to try and prove it.
Despite the withering cross-examination from Sassoon, Bankman-Fried did get to lay out his defense when he was questioned, much more gently, by his lawyer, Mark Cohen.
Bankman-Fried also told the court that he made “a number of small mistakes and a number of larger mistakes.” He said the biggest issue was not having a dedicated risk management team.
“We didn’t have a chief risk officer,” Bankman-Fried said. “We had a number of people who were involved to some extent in managing risk, but no one dedicated to it, and there were significant oversights.”
He blamed his lieutenants at FTX and Alameda for the mistakes they made, including a woman who testified he ordered her to commit crimes.
Bankman-Fried, for example, said that when Ellison led Alameda, she failed to hedge the firm’s investments adequately, which made it vulnerable to steep market downturns.
Ben McKenzie, Michael Lewis, and Tiffany Fong: Crypto influencers and skeptics in the ’90s
The testimony also attracted an array of celebrities including actor Ben McKenzie. The former star of “The O.C.” and “Gotham” is now a “crypto skeptic” and the co-author of a bestseller about cryptocurrency.
Michael Lewis is an author who wrote a book about Bankman-Fried. As he followed the proceedings in the overflow room, he was able to get a seat in the courtroom where he could see Bankman-Fried’s friends and family.
And crypto influencer Tiffany Fong, who has gained some celebrity during the trial after she interviewed Bankman-Fried for hours when he was under house arrest, has summarized each day’s proceedings in video digests.