Sam Bankman-Fried Testifies in Manhattan Court

Sam Bankman-Fried took the witness stand Thursday to defend himself in the government's fraud case against the one-time crypto king — a high-risk gamble rarely used by most defense teams.

Prosecutors from the Manhattan U.S. Attorney's Office presented three weeks of evidence and testimony, resting their case Thursday morning. The defense's case isn't expected to go nearly as long. Lawyers for SBF, as Bankman-Fried is known, indicated they planned to call just three witnesses, including their client.

Judge Lewis Kaplan sent the jury home Thursday to allow Bankman-Fried to testify freely in court, preferring to rule later on what material jurors will be allowed to hear or not.

Kaplan acknowledged the unusual nature of the hearing, noting it had been a long time since he conducted a procedure of this kind, if ever.

Bankman-Fried is charged with seven counts of fraud stemming from the spectacular collapse of cryptocurrency exchange FTX one year ago. He stands accused of misleading customers, investors and lenders about its financial condition while misappropriating $8 billion in customer money to fund an empire-building acquisition spree and paper over trading losses suffered by an investment fund he also owned, Alameda Research.

Prosecutors rested their case Thursday morning after testimony from an FBI agent to authenticate evidence involving Signal chats. For their first two witnesses, defense lawyers called a Bahamanian lawyer who testified that Bankman-Fried complied with initial orders by authorities there after FTX's collapse, and a financial expert who testified that Alameda Research — Bankman-Fried's tandem trading firm — made limited use of its line of credit on the FTX exchange.

Defendants rarely take the stand in their own defense in criminal trials, as the move is fraught with potential risk — any missteps can lead jurors to doubt their credibility, which increases the risk of conviction, and judges can also add more time on prison sentences if they conclude defendants lied on the witness stand. Defendants have a constitutional right to decline an appearance on the witness stand and often do, instead trying their case through cross-examination of prosecution witnesses and raising doubts about whether the government has met its burden of proof.

But such a move can also give a defendant the opportunity to offer an alternative explanation for the evidence in a more favorable way, and also the potential to establish a rapport with the jury if they can come off as likable or believable.

"It’s a uniquely personal decision. And this guy can’t keep his mouth shut," said Renato Mariotti, a former federal prosecutor who focuses on financial and digital asset cases. "He’s a guy who just thinks he’s smarter than everyone else, despite the circumstances in which he now finds himself." 

"I don’t think he’s going to be able to resist the opportunity to tell everyone what he thinks," Mariotti added. "Put his version out there.” 

The prosecution case has featured testimony from several members of Bankman-Fried's inner circle, including his sometime-girlfriend Caroline Ellis, who have implicated him in decisions to tap customer funds for big-ticket expenditures including corporate acquisitions and glitzy promotional efforts to raise FTX's profile such as stadium naming rights and celebrity endorsements. They have testified under cooperation agreements with the prosecution after pleading guilty and admitting their own role in the crimes.