Inside The Most Painful Day of SBF’s Trial

If you close your eyes and breathe through your nose, you might still be able to smell the scent of Sam Bankman-Fried getting grilled on the stand.

That’s because, for hours, he answered question after question from assistant district attorney Danielle Sassoon who brought up screenshot after screenshot and tweet after tweet to challenge nearly every attempt Sam made to explain away his actions in the lead up to FTX’s collapse.

Axios summed up that Sam was “hammered” on the stand. Crypto reporter Laura Shin said he was “murdered” by Sassoon before she then metaphorically “stabbed” SBF’s “dead body over and over again.” Fittingly for Sam, his nightmare time on the stand will likely come to an end today… on Halloween.

But before I list the most damning exchanges from the courtroom, let me hit you with a hot take: I actually don’t think the decision to testify is going as poorly for Sam as people think.

That is to say, for people who came to the trial to see an execution, they probably got what they wanted. For the jury, it remains less clear how exactly an objective person might interpret these things. Is Sam being evasive and dodging questions, or is he answering truthfully and carefully as dictated by his side of the story?

At this point in the trial, the most interesting people to me — as a reporter who is being paid to sit in the courtroom —aren’t actually my fellow members of the press (and author Michael Lewis.) It’s the random spectators who are willfully deciding to spend their free time watching this trial. Arguably, these are exactly the people who are most akin to the jurors who watched this “murder” play out. What do they think?

Today, a trio of teacher moms visiting from England were among the spectators. They swung by on a sight-seeing trip after running a half-marathon to brag to their kids (who are into crypto) that they got to see Sam. Did he look guilty to them?

“He looks like a 14-year-old boy,” one told me after watching him on the stand, adding that SBF’s testimony reminded her of a student who might be in trouble. “He looks like someone who got caught doing something.” It’s worth noting there are a few moms on the jury (granted one is a corrections officer.) And it’s worth reiterating that SBF’s defense efforts aren’t likely to be judged against a guilty/not guilty verdict – but rather, whether he was able to convince even one juror on one of the seven charges to get a partial acquittal.

Coinage will be replicating our on-chain vote in the SBF trial after the defense rests and the jury begins deliberations. Be sure to vote on how you would rule, and we will see how the vote compares to before SBF took the stand.

OK, Onto The Stabbings…

I say today was the most painful day in SBF’s testimony not because it was necessarily the most damning, but because it was … painful. Painful to watch SBF squirm his way to a non-answer only to get pinned down after an extensive back-and-forth. And painful to think about my life ticking away as the prosecution slowly impeached Sam’s recollection step-by-step.

To give you an example of how most of the day went, here’s the eventual 10-minutes spent solely on getting Sam to admit he reviewed the seven balance sheets Alameda CEO Caroline Ellison already testified she prepared and sent to Sam for his review. She testified she laid out seven different ways she could present Alameda’s balance sheet to investors, with Sam approving the one that made it the least apparent that Alameda had borrowed billions of dollars from FTX.

Sassoon: Now let's pull up Government Exhibit 44. And let's start at the main tab, which is the first tab. Caroline sent this document to you, correct?

SBF: She sent a document that at least looked like one of the tabs. It was probably this document.

Sassoon: You received a document with many alternative tabs from Caroline, correct?

SBF: I don't remember whether there were many alternative tabs on it. There very well may have been.

Sassoon: So yes or no: Do you recall receiving this document from Caroline Ellison?

SBF:  I – I don't recall specifically receiving this document as a whole from her. I may have, but I don't recall it being in particular this document.

Sassoon: And so what about this document makes you think that you received it from Caroline?

SBF: I remember receiving a document that at least looks like one of the tabs on it.

Sassoon: And which tab is that?

SBF: When I looked at Alt 7, that at least looked like the thing I received, but honestly, some of the other tabs could have been it as well. I don't remember exactly what it said.

Sassoon: So this main tab.

SBF: Yup.

Sassoon: Yes or no: Do you recall seeing this?

SBF: I don't have a recollection of seeing it, no.

Sassoon: And I want to direct your attention to row 5, columns E and F. Where it says “Exchange Borrows” do you see that?

SBF: I see that.

Sassoon: And I just want to compare that to bank balances. Do you see where it says $525 million?

SBF: Yup, I see that.

Sassoon: And so it's apparent from this tab that Alameda does not have $8 billion sitting in a bank, correct?

SBF: I think that's – I think that's right. I'm not a hundred percent sure how the assets are subdivided, but I think that’s right.

Sassoon: It's your testimony you never saw this?

SBF: I don't think I said I never saw this. I don’t recall whether I saw this.

Sassoon: Do you recall receiving a document from Caroline that had eight tabs?

SBF: I'm not sure.

Sassoon: Well, yes or no, do you recall receiving a document with eight tabs?

SBF: I don't recall how many tabs the document I received had.

Sassoon: Do you recall receiving from Caroline a balance sheet with multiple tabs?

SBF: I assume you mean on or around late June of 2022?

Sassoon: On or around late June 2022, do you recall receiving a spreadsheet with eight tabs?

SBF: I  don't – I don't – I don't specifically recall there being eight-ish tabs on it. There very well may have been.

Sassoon: Now yesterday you testified about alternative 7.

SBF: Yup.

Sassoon: And you said you think you recalled seeing that tab, right?

SBF: Or something like that, yeah.

Sassoon:. And that's the second tab of this spreadsheet.

SBF: That's right.

Sassoon: Now by the time you testified, you knew that the government had obtained Google metadata showing that you had viewed this spreadsheet on June 19, 2022; isn't that right?

SBF’s Lawyer, Mark Cohen: Objection.

Judge Kaplan: Ground?

Cohen: Lacks foundation.

Judge Kaplan: Overruled.

SBF: I'm not sure how to interpret the metadata.

Sassoon: Yes or no, Mr. Bankman-Fried.

Judge Kaplan: You were not asked how to interpret the metadata.

SBF: I'm sorry. Can you repeat the question. I’m sorry.

Sassoon: At the time you testified at this trial, you knew that the government had obtained Google metadata showing that you viewed this spreadsheet, this eight-alternative spreadsheet on June 19, 2022, correct?

Mr. Cohen: Objection.

Judge Kaplan: What's the objection?

Mr. Cohen: Same objection, your Honor.

Judge Kaplan: Same ruling.

SBF: I know that – I know that the – there was metadata that suggested that – that in my view suggested that I may have viewed it.

Sassoon: So yes, by the time you testified, you were aware of Google metadata related to this exhibit?

SBF: Yes.

Sassoon: And this exhibit specifically, not a spreadsheet that looks like this exhibit, correct?

SBF: That's right.

Sassoon: We could take that down.

Painful.

That was also one of about two times Judge Kaplan actively warned SBF to answer the question he was asked.

But, that’s probably not the carnage you came for. And arguably not the “murder” you might be led to believe happened on the stand from the headlines. But impeaching a witness is rarely ever one “smoking gun” (except in the movies.) How about something more straight and to the point?

Impeaching SBF

Well, there were some easy layups the prosecution scored by having SBF read aloud many of his own debacles, like messages he sent to a Vox reporter after the collapse that he claimed he didn’t know were on the record. In that exchange, Sam admitted his calls for crypto regulation were merely for “PR.”

Sassoon: In private you said things like fuck regulators, didn't you?

SBF: I said that once.

Sassoon And you also said in private that the stuff you said about wanting good regulations was just PR, didn't you?

SBF: I said something that was related to that, yes.

Sassoon: Let's look.

SBF: Let's pull up Government Exhibit 803C, which is in evidence.

Sassoon: Can you please read your last two messages.

SBF: Yeah. Just PR. Fuck regulators.

Saying one thing publicly, and saying, or doing another thing behind the scenes was a theme the prosecution tried to hit home again and again Monday.

One of the first examples that set the tone for how the day was going to go was when Sassoon brought up FTX’s core principles and SBF’s promises to the public that it was a safe exchange that boasted a proprietary risk engine that worked to prevent a scenario in which FTX would have to socialize losses on the platform and clawback funds from customers.

Sassoon: And you told the public, for example, that this automatic liquidation process at FTX would prevent clawbacks, right?

SBF: Would—I don't think it went quite that far. That it would help reduce or prevent clawbacks.

Sassoon: So yes or no: You made statements that your liquidation engine would prevent clawbacks?

SBF: I don't remember saying it with exactly that phrasing.

Judge Kaplan: Did you say it in words or in substance?

SBF: With a qualifier, yes.

The prosecution also then showed another marketing example stressing the same risk engine, and the same benefit of preventing clawbacks.

Sassoon: And what does it say right underneath that?

SBF: "Preventing Clawbacks," that it "significantly reduces the likelihood of clawbacks."

Sassoon: Mr. Bankman-Fried, what are the two words under the question of "How is FTX Solving These Issues?"

SBF: The first word is "Preventing," the second word is "Clawbacks."

The prosecution also attempted to make it quite clear that Alameda had special privileges on FTX. Of course, we had already heard this in testimony from SBF’s co-founder Gary Wang and his head of engineering Nishad Singh. They testified they built an "allow negative” functionality only Alameda used. SBF testified he didn’t know this was their solution at the time, and that he did not direct them to build that explicit function — but rather, loosely build something to prevent accidental liquidations of Alameda since it was at one point FTX’s largest market maker.

The prosecution showed multiple articles from a number of crypto reporters who were in the courtroom, and read quotes back to SBF that specifically represented the idea that Alameda was just like any other customer on FTX.

Sassoon: Mr. Bankman-Fried, a typical customer on the FTX exchange could go negative in certain types of assets, right? I think you testified about that.

SBF: Yup.

Sassoon: But to do so, their overall account balance across all assets had to stay above zero, right?

SBF: That's generally true, yes.

Sassoon: Otherwise, if their whole account balance approached zero or was approaching going negative they would be liquidated, right?

SBF: Right.

Sassoon: That was the whole selling point of FTX's innovative liquidation engine?

SBF: That was part of it, yes.

Eventually, the prosecution got to events when it appeared clear the hole had grown large enough that Sam’s alleged co-conspirators all knew that FTX’s hole had grown so large as a result of Alameda’s borrowing that it had a real problem.

As to criminal intent that may have been guiding Sam’s actions at that time, Judge Kaplan has severely limited what his team has been able to discuss in front of the jury. That became clear when part of his answer was stricken after the prosecution pushed Sam on why he sought to move $500 million worth of shares in Robinhood out of an account Alameda controlled.

Sassoon: Mr. Bankman-Fried, at the time that you asserted ownership over these shares, you were aware, weren't you, that many FTX customers were still unable to access their funds in FTX?

SBF: Extremely aware.

Sassoon: And isn't it true that after FTX collapsed you considered calling the Robinhood broker to see if the broker would give you the shares without thinking about it?

SBF: When are you referring to?

Sassoon: After FTX declared bankruptcy, isn't it true that you considered calling the Robinhood broker to see if the broker would give you the shares without thinking about it?

SBF: Yeah. My intention was to hand it to the provisional liquidators.

Sassoon: That wasn't my question, Mr. Bankman-Fried.

Judge Kaplan: Answer stricken. Answer stricken. Pose the question again, please.

Sassoon: After FTX declared bankruptcy, you considered calling the Robinhood broker to see if the broker would give you the shares without thinking about it, correct?

SBF: I didn't actually consider doing that.

Sassoon: Mr. Bianco, can you pull up Government Exhibit 2556. … Mr. Bankman-Fried, you wrote this document, right?

SBF Yup.

Sassoon: And the date here is 2022-12-25, right?

SBF: Yup.

Sassoon: And item No. 3 says, "Should I try calling up the broker HOOD is with and see if they'll just give me the shares without thinking about it?"

SBF: I see that.

Sassoon: And HOOD, that stands for Robinhood?

SBF: Yup.

Importantly, even if SBF claims he was doing so to “hand it to the provisional liquidators,” that will not be something the jury will be allowed to consider when they deliberate.

When it comes to the 12 jurors ruling on the seven charges SBF faces, it’s not clear if any of the many attempts by the prosecution to pin down SBF for misrepresenting risks to consumers or investors changed things, or if SBF taking the stand has helped his odds. When Coinage brings back its vote at the end of the week, our readers will be able to give the clearest indication yet.

Be sure to stay tuned to Coinage for more trial updates!

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Disclosure: Alameda Ventures is one investor among many in Trustless Media, the production company behind Coinage.