Sam Bankman-Fried defense rests in criminal trial, closing arguments kick off Wednesday
FTX Founder Sam Bankman-Fried leaves Manhattan Federal Court after a court appearance on June 15, 2023 in New York City.
Michael M. Santiago | Getty Images
FTX founder Sam Bankman-Fried’s fate is now in the hands of the 12 jurors who have spent the past four weeks sitting just feet away from the former crypto billionaire in a lower Manhattan courtroom.
After three days on the stand, Bankman-Fried’s testimony wrapped up Tuesday morning and the defense rested its case shortly before noon. The jury was sent home, so the judge can decide in the charging instructions what’s admissible before jurors begin their deliberations. Closing arguments will start on Wednesday.
Bankman-Fried, 31, faces a potential life sentence if convicted on fraud charges tied to the collapse of crypto exchange FTX and sister hedge fund Alameda Research late last year. He pleaded not guilty.
Tuesday’s session began with cross-examination from Assistant U.S. Attorney Danielle Sassoon, who has led the prosecution during the trial. Sassoon began by questioning Bankman-Fried’s relationship with Philip Davis, prime minister of the Bahamas, which was home to FTX and Bankman-Fried’s inner circle.
Bankman-Fried was asked if he’d proposed paying off more than $11 billion in national debt for the Bahamas, and he responded by saying he didn’t remember discussing the matter. Sassoon also mentioned how Bankman-Fried would joke that Ryan Salame, a former FTX executive, was effectively a member of the Bahamian government.
Sassoon asked about the prime minister’s visit to Miami and attending a Heat basketball game at the arena that carried the FTX name, and whether he and his wife were given courtside seats. She also mentioned FTX’s opening up customer withdrawals only for Bahamians. As with much of the questioning by prosecutors, Bankman-Fried said little, didn’t admit to anything and frequently responded by saying he didn’t know.
The FTX Arena in downtown Miami, Florida on Friday, June 4, 2021.
Matias J. Ocner | Miami Herald | Tribune News Service | Getty Images
Sassoon again asked Bankman-Fried about the key issue in the case — the $8 billion hole in FTX’s balance sheet. Bankman-Fried said he “deeply” regretted not taking a deeper look at it. When he asked his deputies about the hole, Bankman-Fried testified that they “told me they were busy and I should stop asking questions because it was distracting.”
With no other significant witnesses representing the defense, Bankman-Fried is relying on his ability to convince the jury that he wasn’t intentionally siphoning customer funds out of FTX to use for a host of other purposes, including covering Alameda’s losses, paying for his luxurious condo in the Bahamas, venture investments and the naming rights for the Miami arena.
Encouraging bad regulation
In his first two days on the stand, Bankman-Fried told the court that he didn’t defraud anyone or take customer funds. He testified that one central problem was a lack of a risk management team, which led to “significant oversights.” Beyond that, he spread the blame around to several of his former friends and top lieutenants, some of whom testified against him earlier as witnesses for the prosecution.
Sassoon ended her questioning on Tuesday at about 10:40 a.m. Mark Cohen, Bankman-Fried’s defense attorney, then spent a short amount of time with his redirect examination.
Cohen revisited articles that stemmed from Bankman-Fried’s press interviews after Nov. 11. Bankman-Fried estimated he gave around 50 interviews and didn’t have access to any internal documents. He said he didn’t remember every statement he made to journalists.
One notable comment he made was to Vox in mid-November. In a text exchange with the reporter, Bankman-Fried wrote “F— regulators.” Bankman-Fried testified that he was growing frustrated with regulators and skeptical about what they were doing. He said he felt all the work he’d done might have encouraged bad regulation as much as good regulation.
After the mid-morning break, Cohen asked Bankman-Fried to clarify a few things. He asked why the defendant hadn’t fired anyone when the $8 billion liability had been discovered. Bankman-Fried said he wasn’t particularly interested in blaming others and was instead focused on how to get things turned around and moving forward.
FTX founder Sam Bankman-Fried is questioned by prosecutor Danielle Sassoon (not seen) during his fraud trial over the collapse of the bankrupt cryptocurrency exchange at federal court in New York City, U.S., October 31, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Regarding a $65 billion line of credit to Alameda, Bankman-Fried said that was the maximum withdrawal size but it was never near that amount. He said it was typically around $2 billion.
Finally, following issues raised by the prosecution about Bankman-Fried’s excessive use of a private jet, the defendant said he thought it was a valid expense as CEO. He testified that he wasn’t using it for personal travel, and that it was logistically difficult to fly from the Bahamas to Washington, D.C., where he estimated he spent more than a month in total.
With the jury gone for the rest of the day and closing arguments set to begin on Wednesday, Bankman-Fried is now out of opportunities to convince the jurors that he doesn’t deserve a lengthy prison sentence. Deliberations will start after closing arguments.
— CNBC’s Dawn Giel contributed to this report.
WATCH: FTX founder retakes stand
The Nasdaq MarketSite in New York, June 9, 2023.
Michael Nagle | Bloomberg | Getty Images
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
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