Sam Bankman-Fried takes the stand

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Ethan Wu (0:30)

Hey Unhedged listeners, it's 8:30 p.m. New York time. Sam Bankman-Fried has just been convicted on all counts. We recorded the following episode of Unhedged before the verdict was in, but I think you'll hear in our discussion a couple of the reasons why the jury opted to convict. You can even hear at the end of the episode us speculate wrongly about how long it would take the jury to make a decision. I hope you enjoy this episode.

Pushkin.

Listeners will recall we discussed the trial of Sam Bankman-Fried and the case against him last week on the show. This week, Sam takes the stand. This is Unhedged, the markets and finance show from the Financial Times and Pushkin. I'm reporter Ethan Wu here in the New York studio, joined today by US financial commentator Robert Armstrong.

Robert Armstrong (1:25)

Actually, my role is people too old to understand crypto correspondent at the FT.

Ethan Wu (1:32)

Elder advocate, Robert Armstrong. And once again, fresh from the New York courtroom steps, Joshua Oliver.

Joshua Oliver (1:39)

Yes, again, fresh from sweating my way uptown.

Ethan Wu (1:44)

Josh, we've seen now the case Sam Bankman-Fried made for himself. And I mean, it must have been like a high tension moment when Sam takes the stand. You correctly predicted last time that he would.

Joshua Oliver (1:55)

Yeah, me and in fairness, many other people, but there was some interesting, I mean, a little bit of courtroom mechanics, but it was interesting that the prosecutors clearly thought he was gonna take the stand because they had evidence that they held back for his cross-examination and didn't kind of tip their hand before, which they would then not have been able to use if he hadn't taken the stand because he kind of goes last. So the fact that they were kind of keeping some material specifically for the cross, it was pretty good juicy stuff, kind of shows that they were banking on that as well. But yeah, he had the opportunity to get up there and say what he wanted to say.

He, I think, was very keen to tell his side of the story.

Robert Armstrong (2:34)

From the point of view of his lawyers, why put him up there?

Joshua Oliver (2:38)

All else being equal, I don't know if his lawyers would have put him up there. I mean, the white collar defense lawyer playbook is don't let your client testify because it's dangerous. A couple of factors. I mean, he's a particular client and at the end of the day, he can decide. It's better for the lawyer to act like it's all their idea and it's a plan rather than have Sam freelancing.

And I think Sam was determined to testify all the way through. He's always wanted to say what he has to say and God knows he spoke to enough journalists before.

But then I think also, he's the only person, I think we talked about this last week, he's the only person who really can tell his side of the story. I mean, one way of looking at this case in a super simplified, ball-down way is there's four people in a room, they walk out of that room and then they repay a bunch of lenders billions of dollars that ultimately, if you look at the mechanics, it's borrowed from the customer. And then three of those people are the cooperating witnesses, Sam's three deputies who say, yeah, Sam ordered us in this meeting to take the money and he knew it was gonna come from the customers. So how do you rebut that testimony? He's the only person who can do it because there are four people in the room where it happened.

Ethan Wu (3:53)

We'll get into that in a second, but why don't we just start by recapping, what happened last time, on last episode of this show with the prosecution against Sam. I mean, if I had to sum it up just very quickly, it seemed like the case was basically, there was money that the customers put in and when they came back, it was not there. Where was the money? It was in venture capital investments and celebrity endorsement deals and sports stadiums naming rights and expensive penthouses in the Bahamas.