Sam Bankman-Fried’s lawyers reveal his planned testimony in FTX fraud

Lawyers for Sam Bankman-Fried late Wednesday revealed details of his planned testimony if he takes the witness stand at his FTX fraud trial.

Bankman-Fried’s legal team told Judge Lewis Kaplan in a six-page letter that he would address three key areas in such testimony, including suggesting that he relied on FTX’s former legal team in allowing some actions that later led to the implosion and bankruptcy of the cryptocurrency exchange.

Lawyers for the disgraced FTX chief also said he would also cite his understanding of common industry practices, as well as his intention to comply with Bahamian authorities.

Bankman-Fried faces seven criminal counts, including wire fraud, securities fraud and money laundering, that could land him in prison for more than 100 years if he is convicted at his trial in Manhattan federal court.

Bankman-Fried, the son of two Stanford legal scholars, has pleaded not guilty in the case.

The letter to Kaplan appears to cast doubt on whether the disgraced crypto billionaire will take the witness stand.

Earlier Wednesday, one of Bankman-Fried’s two chief trial attorneys, Mark Cohen, said in a conference call that his client would testify as would three other people.

But in his letter Wednesday evening, Cohen wrote, “Accordingly, should Mr. Bankman-Fried decide to testify in his defense, he should be permitted to testify as to his understanding of industry practices regarding use of omnibus wallets to show his good faith and lack of criminal intent.”

The statement suggests Bankman-Fried might stand down on testifying, should the defense’s requests be rejected.

Kaplan previously ruled that Bankman-Fried’s lawyers could not make a so-called advice of counsel argument in their opening remarks since it might risk prejudicing the jury.

But Cohen in the new letter told Kaplan that although prosecutors “previously moved to preclude Mr. Bankman-Fried from offering evidence or argument regarding the involvement of attorneys,” Bankman-Fried’s “knowledge of the involvement of counsel in these matters” is “directly relevant” to “his state of mind and good faith at the time.”

Cohen cited specific examples where, at the guidance of FTX lawyers, Bankman-Fried adopted a policy which prosecutors argued shows his criminality.

One example was company-wide policy on the encrypted messaging app Signal.

Caroline Ellison, Bankman-Fried’s ex-girlfriend who also ran crypto hedge fund Alameda Research, testified SBF directed FTX and Alameda employees to use the disappearing message setting on Signal. She said he told them to be very careful about what they put in writing because of potential legal exposure. 

Lesser-known FTX co-founder and ex-chief technology officer Gary Wang, as well as senior FTX developer Adam Yedidia, also testified to the directive that Signal communications be set to auto-delete.

The government similarly asserted in its opening argument before the jury that the 30-day auto-deletion policy on…