<\/p>\n
Sam Bankman-Fried took the stand for the first time Thursday afternoon in Manhattan, but he didn\u2019t have to answer to the jury just yet.\u00a0<\/p>\n
The dress rehearsal gave the public a glimpse into the defense\u2019s case, which appears to rely on one document they cannot actually produce: an alleged \u201cdocument retention policy\u201d attorneys apparently drafted for Alameda and FTX.\u00a0<\/p>\n
Senior Judge Lewis Kaplan ordered a hearing Thursday afternoon, opting to dismiss the jury early to privately hear direct testimony from Bankman-Fried, plus a cross examination from the prosecution.\u00a0<\/p>\n
The purpose was for Kaplan to decide what he will allow the parties to repeat in front of the jury Friday.\u00a0<\/p>\n
The defense strategy was clear: Establish that Bankman-Fried acted on the advice of his attorneys at the time, including following their advice to not retain certain information. The only problem? The \u201cdocument retention policy\u201d Bankman-Fried said former FTX chief regulatory officer Dan Friedberg crafted with outside counsel is nowhere to be found.\u00a0<\/p>\n
\u201cWe have been unable to serve the subpoenas asking for it,\u201d Bankman-Fried testified when lead prosecutor Danielle Sassoon asked where the policy was.\u00a0<\/p>\n
Right before court adjourned for the day, the prosecution told Kaplan that they would oppose Bankman-Fried repeating this particular point in front of the jury. Kaplan clarified that if Bankman-Fried brought up the previously rejected subpoenas in open court, the judge would tell the jury about the defense\u2019s chance to apply for a trial subpoena.<\/p>\n
Bankman-Fried testified that, from his understanding, enforcing auto-delete mechanisms in Signal chat was allowed. Though he added that he is unsure if Signal was actually mentioned by name in the policy.<\/p>\n
\u201cI wish I had that policy now,\u201d Bankman-Fried said. \u201cI\u2019m working off my memory of it.\u201d\u00a0<\/p>\n
Bankman-Fried said that anything outside of know-your-customer data, \u201cformal business discussions,\u201d official documents and other company-wide communications, nothing needed to be retained.\u00a0<\/p>\n
That said, Sassoon and Bankman-Fried\u2019s definitions of \u201cformal business discussions\u201d appeared to differ. Sassoon asked, for example, if the decision to use customer funds would be considered \u201cformal,\u201d in Bankman-Fried\u2019s opinion.<\/p>\n
Any documents \u201cstill being workshopped\u201d would not need to be retained, Bankman-Fried replied, like, for example, the seven alternative balance sheets<\/a> former Alameda CEO Caroline Ellison sent via a Signal auto-deleting chat.\u00a0<\/p>\n After about two and a half hours on the stand, Kaplan began showing his annoyance with Bankman-Fried\u2019s tendency to avoid answering questions directly.\u00a0<\/p>\n \u201cThe witness has what I\u2019ll simply call an interesting way of answering questions,\u201d Kaplan told counsel. Later, he reminded Bankman-Fried that he must answer the questions posed to him.<\/p>\n Lines to enter the courthouse started forming well before sunrise on Thursday morning after news that Bankman-Fried would testify broke Wednesday morning.\u00a0<\/p>\n Among the notables in court to watch: Ben McKenzie, actor-turned-author of Easy Money,<\/em> and Michael Lewis, who penned \u201cGoing Infinite<\/a>\u201d.<\/p>\n The government, which started presenting their case on Oct. 4, rested Thursday morning on the fourth week of trial. After a last-ditch \u2014 but expected \u2014 effort from the defense to acquit Bankman-Fried on all charges based on claims that the prosecution has not provided sufficient evidence to support their case, the defense began their case.\u00a0<\/p>\n The criminal trial, with Bankman-Fried facing seven counts of fraud and conspiracy, looks like it\u2019s heading for an early adjournment.\u00a0<\/p>\n The prosecution and defense teams agreed that they seem on track to issue closing statements next week, potentially as soon as Tuesday. The trial was originally slated to last six weeks.<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\nLooking ahead to Friday<\/h2>\n
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