The wait for Sam Bankman-Fried’s testimony before a jury will be a little longer.
Judge Lewis A. Kaplan, who is overseeing the disgraced crypto mogul’s federal criminal trial, sent jurors home on Thursday afternoon just before Mr. Bankman-Fried was expected to take the stand. Judge Kaplan opted instead for a hearing to discuss pending testimony from Mr. Bankman-Fried, who founded the FTX cryptocurrency exchange, with regard to his reliance on company lawyers in making decisions.
The jury will return on Friday, when Mr. Bankman-Fried is expected to testify.
The delay came after the FTX founder’s lawyers called their first two witnesses and after more than two weeks of testimony from prosecution experts and associates that painted Mr. Bankman-Fried as a liar who treated FTX as a personal piggy bank. He is accused of orchestrating a sweeping scheme to use as much as $10 billion in FTX customer deposits to finance venture investments, real estate purchases and other lavish spending.
Mr. Bankman-Fried, 31, has pleaded not guilty to seven counts of fraud, conspiracy and money laundering. If convicted, he could get what amounts to a life sentence.
The defense has maintained that Mr. Bankman-Fried is not a criminal and that every decision that led to FTX’s rapid failure had been made in “good faith.” But legal experts who have been following the case believe he faces an uphill battle.
Despite the complicated nature of Mr. Bankman-Fried’s business and its connection to a closely related crypto trading firm he ran, prosecutors have presented their case as a garden-variety fraud investigation, sticking to relatively simple concepts. And many of the witnesses they have called received only minimal pushback from Mr. Bankman-Fried’s lawyers.
Judge Kaplan ordered the evidentiary hearing on Thursday afternoon to determine the scope of Mr. Bankman-Fried’s testimony when it came to relying on FTX’s lawyers in his decision making. The judge had previously ruled he would curtail such testimony, but had left the door open for Mr. Bankman-Fried to revisit the issue during the trial.
The unusual hearing, conducted without the jury in the courtroom, gave a preview of how Mr. Bankman-Fried might appear on the stand. When questioned by his lawyer, the FTX founder looked straight ahead and spoke calmly as he discussed several technical matters, including the exchange’s document retention policy.
Mark Cohen, one of Mr. Bankman-Fried’s lawyers, said he wanted show that his client “took comfort” in making his decisions after consulting with lawyers.
Under cross-examination by prosecutors, Mr. Bankman-Fried punctuated his answers with “ums” and “ahs,” and often looked down at his lap for several seconds before responding. At times, his mother, Barbara Fried, who was sitting in the gallery, gesticulated emphatically as he was bombarded with questions.
At one point, Danielle Sassoon, a federal prosecutor, asked Mr. Bankman-Fried if he spoke with lawyers about the ability of his crypto trading firm, Alameda Research, to use FTX’s customer deposits. The prosecution’s central charge is that Mr. Bankman-Fried misappropriated FTX customer money that had been transferred to Alameda.
Mr. Bankman-Fried said “in retrospect,” he wished he had more conversations with lawyers about the use of FTX customer money. “I wish that I myself had been more informed,” he said, later adding that there were some issues concerning the use of FTX customer money that he did not discuss with lawyers.
At times, Mr. Bankman-Fried responded with his own questions or stated that he did not understand what was being asked. When his lawyer objected to one line of questioning from the prosecution, Judge Kaplan said he found it appropriate.
“Part of the problem is that the witness has what I’ll simply call an interesting way of responding to questions,” the judge said.