The Journal. - The Trial of Crypto’s Golden Boy: Closing Arguments

Episode Date: November 2, 2023

Both the prosecution and the defense make their final pitches to the jury as FTX founder Sam Bankman-Fried’s trial comes to a close. Rachel Humphreys and Caitlin Ostroff unpack closing arguments and look ahead to the trial’s conclusion. Further Reading: - What’s Happening Today at the Sam Bankman-Fried Trial  Further Listening:  - The Trial of Crypto’s Golden Boy  Learn more about your ad choices. Visit megaphone.fm/adchoices

We are recording this a bit later in the evening than usual with some pizza here in the studio because we had a long day at court today. We got there in the dark and we left in the dark. And that's because today we heard the closing arguments in the trial of Sam Bankman Freed. We got to hear from the prosecution and the defense. Yeah, and Judge Willis Kaplan was determined that we would get through closing arguments today. He kept us there about an hour and a half later than we usually get out. But it started off with a nearly four-hour-long speech from prosecutor Nicholas Vose, and it was riveting.

Vose was working really hard to drive home the idea that Bankman Freed was at the center of the alleged fraud. And on top of that, Vose called Bankman Freed a liar, even saying that the testimony he gave to the jury over the course of three days was a lie. But then this afternoon, we got to hear the other side, Mark Cohen, the lawyer for the defense, gave us a very different version of events, didn't he? Yeah, and Cohen's arguments felt completely different. He told the jury that the government had made Bankman Freed out to be a sort of cartoon villain, and they needed to look again at the evidence in a new way. And Cohen ended on an emotional note in the courtroom with a plea to the jurors.

You know, we ask you to find our client, Bankman Freed, not guilty. From the Journal, this is the trial of crypto's golden boy. I'm Caitlin Ostroff. And I'm Rachel Humphries. Coming up, a final pitch to the jury. When it comes to smart water alkaline 9.5 plus pH with antioxidant, there's nothing to overthink. So, while you may be performing mental gymnastics over whether the post-work gym crowd is worth it, if you'll be able to find a spot for your yoga mat,

or if that spin instructor will make you late for dinner again, don't overthink how you hydrate. Life's full of choices. Smart Water Alkaline is a simple one. I just wanted to put it on the record that we discovered a new feature at the court today, which is if you go into the cafeteria in the morning, you can order a home-baked pie to be made by lunchtime, which we did today, a blueberry pie. It was delicious and an unexpected bonus in the courtroom cafeteria. Yeah, we did that because it was one of the other reporters' birthdays today. So we were like, let's go and get a pie in addition to the coffee.

So before we get into what happened in the courtroom today, we should pick up where we left off in our last episode. Sam Bankman-Fried finished his testimony and the defense rested its case. And then today was closing arguments. And if opening statements are like movie trailers, closing arguments are really the highlight reel before the jury essentially reviews the movie. And the prosecution and defense

have very different highlights from this trial. And first up for the government was Nicholas Rose. Yeah, and Rose is tall, commanding, and bald. And Rose spoke for hours, seemingly without reading from any prepared remarks. And he was really engaging. He looked directly at the jury. He spoke with his hands. He was moving around a bit. He raised his voice from time to time so they could tell when he felt something was important. And he was really engaged with the jury. And early on, he turned to the jury and asked who was responsible. And he pointed at Bankman-Fried and said,

this man, Samuel Bankman-Fried. And you always know you're in trouble when someone is using a full name, which was the only time actually that Rose said Bankman-Fried's name at all. I mean, in other instances, he simply referred to him as the defendant. Yeah. And Rose went on to argue that Bankman-Fried spent his customers' money to cover expenses, to buy property, and to make donations. And then he lied about it, Rose said. Rose called it a, quote, pyramid of deceit. And, you know, Rose said that deceit is at the heart of this trial. He essentially told the jury, you know, you've heard all of this crypto jargon, much of which you've been keeping track of, Rachel. The bitcoins, the blockchains, etc.

But Rose said this isn't about complicated issues of cryptocurrency and blockchain. It's about lies and stealing and greed. Yeah. And Rose made that point consistently throughout, arguing that Bankman-Fried had lied. He lied to the media. He said he lied to investors. And he said Bankman-Fried was also lying to the jury. And this was around the point where I began to think that Bankman-Fried's decision to testify in this trial may be backfiring a little bit because Rose used his testimony against him a lot today and highlighted inconsistencies in it. Yeah, at one point, Rose referenced what he described as a stunning moment of Bankman-Fried's testimony, which was when Rose said Bankman-Fried admitted

to knowing about a piece of code that gave Alameda special privileges. Yeah, and this is important because what Rose was trying to show was that Bankman-Fried was inconsistent on the stand. You know, he admitted in testimony to knowing about this piece of code, but he couldn't recall many other high-level decisions. And Rose also pointed out that Bankman-Fried was a different person when questioned by his own lawyers. Rose noted that Bankman-Fried had an excellent memory when he was questioned by the defense attorneys, but when prosecutors took their turn at questioning him, he told the government 140 times that he couldn't recall. Yeah, I was glad someone had been counting because

we'd tried and given up early on. Now, the core dispute in the trial, and this is something that Rose pointed out, is whether or not Bankman-Fried knew about the fraud that was being committed. Bankman-Fried testified that he was unaware or didn't recall key pieces of evidence or moments where his former colleagues, Caroline Ellison, Nishad Singh, and Gary Wong, said he knew about the fraud. So today, Rose produced slides to counteract Bankman-Fried. For example, he pulled up metadata, kind of the underlying information on documents,

on when they're created, who created them, that type of thing. And he pulled up the metadata on Google Docs that Bankman-Fried said during his testimony that he couldn't recall looking at or only recalled partially looking at. And in one instance of this, the metadata showed that Bankman-Fried viewed a spreadsheet that Ellison said she had shared with him containing information on all of the money that Alameda was borrowing from FTX. And the metadata showed actually that Bankman-Fried viewed that spreadsheet on June 14th, 2022, whereas when Bankman-Fried testified, he said that he didn't know that Alameda was borrowing such a significant amount of money until later.

doing through all of this was sort of showing these digital fingerprints and connecting Bankman-Fried to them and therefore the scene of the crime. And it felt like a compelling argument. Now, I was watching the jurors as much as I could throughout all of Rose's speech today, and they seemed to be very engaged. They were watching him closely, and many of them were taking notes. And then early this afternoon, Rose ended in a very dramatic way. Again, he faced the jury and he asked them to follow the truth and do justice. And then the defense got up to make their case

and we're going to get to their arguments next. We'll see you next time. Whether your skincare routine is working because you look the same or is doing nothing because you look the same and whatever the heck red light therapy is. It's definitely not that. Don't overthink how you hydrate. Life's full of choices. Smart water is a simple one. Travel better with Air Canada. You can enjoy free beer, wine and premium snacks in economy class. Now extended to flights within Canada and the US.

Cheers to taking off this summer. More details at aircanada.com. so this afternoon mark cohen sam bankman freed's lawyer took the podium to make his client's final case to the jury yeah whereas rose was loud and confident and made strong eye contact with the jury cohen was more softly spoken and deferential. He huddled over the podium, bumping into the microphone occasionally, and he looked down a lot at his notes. He didn't really speak directly to the jury in the same way that Rose did. But he began by thanking the jury for, quote, keeping an open mind. And Cohen argued that the government prosecutors were painting Bankman-Fried as this villainous, greedy monster.

He said that it was wrong and unfair, but that in reality, Bankman-Fried was the young CEO of a successful company and that things just got out of hand. Yeah. And Cohen said that things might have been different if FTX had a chief risk officer and he kind of conjured a hypothetical risk officer that he referred to as she, who he said would have prevented some of the company's accounting issues. And he ended that point by saying, quote, bad business judgments are not a crime. Right. And Cohen said that overall, Bankman-Fried was acting in good faith. And as part of acting in good faith,

Cohen said that Bankman-Fried agreed to testify in his own defense, which he didn't have to do. And Cohen argued that the government was unfair on assessing Bankman-Fried's testimony. Cohen said the government didn't like if Bankman-Fried's answers were long or short. If he tried to explain, they said that he was evasive. And he wasn't as polished

as the government witnesses. And this was the dynamic Cohen kept referring to as a, quote, heads I win, tails you lose. Basically, no matter how Bankman-Fried answered questions, you know, the government was trying to paint him as someone who was not credible. And Cohen asked the jury to look again at the evidence and reconsider it throughout his argument this afternoon. For example, he asked them, if Sam was a criminal mastermind, why did he go before Congress? Why did he do media interviews? He really wanted the jury to look at things in a different way, didn't he? Yeah, he wanted to point out that Bankman-Fried wasn't hiding or conspiring.

He also asked the jury to consider why Bankman Freed would repay Alameda's lenders. Cohen asked, quote, why didn't he keep the money and run? And Cohen's arguments took us into the early evening. And Cohen ended by casting doubt on the testimony we heard from Singh, Ellison, and Wong, primarily by arguing that they gave that testimony in the context of facing lengthy prison sentences. Yeah, Cohen asked the jury to be skeptical of the testimony of Bankman-Fried's inner circle. He questioned why, if they really believed that they were in a criminal situation, they didn't, you know, quit or call lawyers or notify authorities. And then he showed the inner circle's names and the sentences that they would

face in prison for the charges that they had pleaded guilty to. And he reminded them that, you know, in exchange for the testimony they gave for the government, that the inner circle, you know, was hoping for leniency. He said, quote, they are not the government that the inner circle, you know, was hoping for leniency. He said, quote, they are not going to get it by saying, you know, Sam was our friend. And Cohen ended his argument in quite a slow, poignant way. He asked the jury to be the defense's voice in deliberations. And he said that Bankman-Fried had acted in good faith throughout. And he asked the jury to find Bankman-Fried not guilty on all counts. Now, I noticed that Bankman-Fried at that moment

was looking across the courtroom at his parents, which he's rarely done throughout this trial. And actually, we saw his parents this evening leaving the court with their arms tightly wrapped around each other's shoulders. It was really a somber end. But of course, this isn't quite the end yet. The government gets the last word tomorrow. Prosecutor Danielle Sassoon is poised to take the rebuttal and she'll get to push back on the defense's closing argument. And then the jury will get some very lengthy instructions

from Judge Kaplan, 60 pages worth, about how to consider the charges against Bankman-Fried in determining whether Bankman-Fried is guilty or not guilty. And then they'll be handed the case for deliberation. And then after that, the thing we're waiting for is the moment of truth. Yeah, but remember, it's not clear when we'll get a verdict. There's a chance that the jury could reach a verdict as early as Thursday night,

or it could take a lot longer. It really all depends on when the jury, the 12 members of the jury, can reach a unanimous verdict. Before Caitlin and I go, we want to know what questions you, our listeners, have for us about this trial. Are there legal arguments you want us to explain, or are there any parts of the Sam Bankman-Fried story that you feel we've missed? or are there any parts of the Sam Bankman-Fried story that you feel we've missed, please get in touch with us. Send us an email to thejournal at wsj.com

and we'll answer some questions in a future episode. That's all for today, Thursday, November 2nd. The Trial of Crypto's Golden Boy is part of The Journal, which is a co-production of Spotify and The Wall Street Journal. I'm Caitlin Ostroff. And I'm Rachel Humphries. Thanks for listening. Check back here for trial updates.