In a threesome Weeks into his trial, Sam Bankman-Fried, founder of crypto exchange FTX, has watched in near silence as a parade of former colleagues, colleagues and other witnesses took the stand. They have witnessed his greed, ruthlessness, bullying and bullying. His lawyers took relatively little retaliatory action – and that’s what they did pilloried for it. But the defense’s strategy and ambitions were misinterpreted, former prosecutors say.
Bankman-Fried is accused of multiple counts of fraud in connection with the collapse of FTX. The exchange fell to pieces in November after users discovered they were unable to withdraw their funds, totaling billions of dollars. The money was missing, the US government claims, because Bankman-Fried had funneled it into a sister company, Alameda Research, where it was used to finance high-risk crypto trades, venture bets, private loans, political donations, debt repayments and other costs.
Mark Cohen and Christian Everdell of the law firm Cohen & Gresser, which specializes in corporate and white-collar cases, have been appointed to defend Bankman-Fried. Her cross-examination of key prosecution witnesses – notably Caroline Ellison, Alameda CEO and former girlfriend of Bankman-Fried – was described in the press as “meandering“”confused,” And “lackluster“. The defense has also angered the judge with repeated questioning, baseless objections and requests for asides: “I’ve given you plenty of leeway,” Judge Lewis Kaplan told the defense on Oct. 5, “but you’re wearing out the welcome.”
But in a case like this, says Joshua Naftalis, a former U.S. attorney and partner at the law firm Pallas Partners, where the evidence against the defendant appears “incredibly overwhelming,” the defense may not have an easy time of it. It is therefore “unfair” to claim that Bankman-Fried’s lawyer is “manipulating,” Naftalis says. “You’ve been dealt a challenging hand.”
In its opening statement, the defense indicated that it would attempt to defend Bankman-Fried by undermining the credibility of key witnesses, shifting blame for fraudulent actions onto members of his inner circle, and showing that he acted in a way that… any sensible businessman could have done so. Much of the criticism of the defense focused on its failure to achieve the first goal: questioning the reliability of the inside witnesses who stood to benefit from plea deals in return for their testimony.
Ellison left the booth virtually unscathed, as did FTX co-founder and CTO Gary Wang. On October 17, the defense scored only minor points against Nishad Singh, FTX’s technical director, who had testified about his dismay at FTX’s reckless spending but also, as Cohen pointed out, had taken out a large personal loan from the firm after he had found out about the alleged theft of customer funds.