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Sam Bankman-Fried Struggles to Explain Himself

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Sam Bankman-Fried is testifying in his own case. He has the chance to tell his side of the story—something he’s historically been very good at—but now the former FTX executive is having trouble explaining himself.

First, here are three new stories from The Atlantic:

A Nearly Impossible Interlocutor

On the witness stand in a Manhattan federal courtroom yesterday, Sam Bankman-Fried gave off the impression that he was not accustomed to being grilled. For years, that was true: No investors sat on FTX’s board of directors, and people clamored to give him money without doing proper due diligence. But even if people had tried to question Bankman-Fried about the integrity or process of his company, it seems he would have proved a nearly impossible interlocutor. On the stand, he eagerly explained complicated tech concepts such as the blockchain. But when tougher questions about seemingly straightforward topics were brought up—such as whether or not a payment agreement authorized Alameda Research, FTX’s sister company, to spend customer funds, and whether he got permission from lawyers to destroy messages—he deflected, reframed, apologized, and changed the subject.

The question of whether Bankman-Fried would testify in his own defense has been hanging over his trial since it began nearly four weeks ago. Testifying allows a defendant to tell his own story, but it also opens him up to self-incrimination. Bankman-Fried’s lawyers announced on Wednesday that he would testify, and he was expected to start yesterday. Instead, the judge made the unusual decision to hold an evidentiary hearing, in order to decide what parts of Bankman-Fried’s testimony would be permissible to include before the jury. This surprise hearing was effectively a dry run of Bankman-Fried’s testimony, which began in front of jurors this morning. (A spokesperson for Bankman-Fried declined to comment.)

With the confident, at times slightly condescending manner of a special-interest-podcast host, Bankman-Fried first answered a series of easy questions from the defense, arguing that FTX’s lawyers were to blame for many of the company’s failures, and claiming that he had followed their guidance in good faith. For a short while, he appeared at ease. He famously used to play video games during important calls—with investors, with Anna Wintour, with journalists—and some of that weary insouciance came through while he was on the stand. “Yep,” he sometimes chirped in the middle of his lawyer’s questions, as if he was already bored of the question.

But during cross-examination, conducted by Assistant U.S. Attorney Danielle Sassoon, Bankman-Fried began to flounder. I watched as he rotated through a number of tactics in quick succession. He repeatedly said that he didn’t remember a lot of aspects of running his company. He used passive voice excessively, describing a business that was apparently operating itself around him. That was unsurprising; his lawyers have been signaling that other people were to blame for FTX’s failures throughout the trial. More unusual was the way that he began to attempt to gain the upper hand in the cross-examination: At some points, he condescended to Sassoon, or adopted the rhetoric of the lawyers. “Once again, I will give a specific answer, but if this is not scoped correctly, tell me,” he said at one point (as if it was his job, not that of the lawyers and judge, to worry about scope). At another point, Bankman-Fried conveyed his apologies that “because of the order we’re doing this in, this [response] will be a somewhat substantial digression.” Sassoon didn’t blink at this implicit critique of how she was doing her job. Bankman-Fried is used to being on the side of people like elite lawyers. (His parents, both Stanford law professors, were sitting in court, jotting down notes or doodles in legal pads.) Facing off against lawyers in court, he alternated between presenting himself as a collaborator who was just trying to help and offering word-salad answers that did not help at all.

Bankman-Fried also subtly attempted to erode Sassoon’s authority by suggesting that her questions were unclear: “I wouldn’t phrase it that way. But I think that the answer to the question I understand you to be trying to ask is yes,” he said, in response to a question—of central importance to the case—about whether a payment agreement allowed Alameda to spend customer deposits. When Sassoon pulled up an exhibit and asked Bankman-Fried to point out where in the agreement it said that Alameda was allowed to spend customer funds, he paused for well over a minute, casting his eyes downward. Then, at last, he broke the silence: “So I should preface this by saying I’m not a lawyer,” he said, before delivering such a long and convoluted answer that Sassoon got the judge’s approval to repeat the question and try to get him to answer it again. In front of the jury this morning, Bankman-Fried stuck to the narrative his lawyers had set up in recent weeks, portraying himself as a hard-working entrepreneur who got in over his head.

Bankman-Fried has always been a good talker, and it’s that skill that helped him not only to make money, but to gain power. Telling his side of the story is his specialty. A big part of this story is that FTX was never really about getting rich. Bankman-Fried did, of course, come to be worth billions of dollars. But he justified his profitable gambits by saying that he was using his money to make the world a better place. Through his millions of dollars of donations to the effective-altruism movement, he devoted himself to a goal no less lofty than saving the future of humanity, focusing large portions of his philanthropy on artificial intelligence and preventing future pandemics.

Through prolific additional donations (many of which are now under legal scrutiny), he also attempted to reshape politics; Bankman-Fried was one of the biggest donors of the 2022 campaign cycle. He also made repeated trips to Washington and lobbied consistently for the crypto industry. Before FTX collapsed, Bankman-Fried’s money, and his power, was in fact beginning to change the world—in part because no one questioned him in the way that government prosecutors have done in court. After watching him yesterday, I’d guess that even those who might have tried questioning him didn’t get very far; Bankman-Fried’s rhetorical gymnastics were exasperating (especially to Judge Lewis Kaplan, who kept admonishing him to just answer the questions). Bankman-Fried is a numbers guy; his lawyer called him a “math nerd” in court. But he’s also long been a language guy, deft at using words to gain power. In court yesterday, under the harsh scrutiny of federal prosecutors, that rhetoric was falling flat.


Today’s News

  1. Judge Arthur Engoron ruled that Ivanka Trump must testify at her father’s New York civil fraud trial.
  2. The United States carried out two precision strikes on Iran-linked locations in Syria as retaliation for attacks on its bases and personnel in the area.
  3. Li Keqiang, the former premier of China, died at the age of 68.


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Evening Read

Photo-illustration by The Atlantic. Source: jjwithers / Getty.

Why America Doesn’t Build

By Jerusalem Demsas

Here’s how wind-energy projects aren’t built in America. This particular story took place a decade ago but could easily have unfolded last year or last month. In 2013, a Texas-based company put forward a proposal to build two windmill farms in northeastern Alabama. The company said that the farms would generate enough power for more than 24,000 homes, eagerly projecting that it would break ground by the end of 2013. But local opposition swiftly defeated the project. Opponents also won stringent regulations that made future wind farms in the area extremely unlikely…

In the typical cultural script, a polluting corporation tries to crush the little guy; a pipeline threatens a defenseless fox; a faceless bureaucrat charts the course of a highway through a thriving neighborhood. Accordingly, American environmentalists have developed tools to help citizens delay or block development. These tools are now being used against clean-energy projects, hampering a green transition. The legal tactics that allow someone to challenge a pipeline can also help them fight a solar farm; the political rhetoric deployed against the siting of toxic-waste dumps can be redeployed against transmission lines. And the whole concept that regular people can and should act as a private attorneys general has, in practice, put the green transition at the mercy of people with access, money, and time, while diluting the influence of those without.

Read the full article.

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Watch. David Fincher’s The Killer (in select theaters) is a movie about the perils of being a control freak.

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Katherine Hu contributed to this newsletter.

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