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Racing Towards the Bottom

Legal Experts Say SBF Is in Deep Trouble

byMaggie Harrison Dupré
10.18.23, 8:55 AM EDT
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Things aren't looking too hot.

Mounting Danger

As former FTX CEO Sam Bankman-Fried's criminal trial settles into its third week, legal experts don't seem particularly optimistic about the ex-billionaire's chances of exoneration.

Bankman-Fried, who's currently on trial in New York City as he pleads not guilty to several counts related to fraud and the misappropriation of FTX customer funds, has spent the last few weeks facing the often brutal testimonies of his former friends and colleagues, who together have painted an increasingly damning portrait of their ex-boss and his alleged crimes.

And as several legal experts told The Washington Post, it seems that the prosecution's witness-heavy strategy is working — while Bankman-Fried's defense seems to be struggling.

There's "no question [the defense is] having a really hard time," Rebecca Mermelstein, a former federal prosecutor for the US Attorney's Office for the Southern District of New York, told WaPo. (The Southern District's office is prosecuting the case.)

Walls Closing In

Speaking to WaPo, experts called special attention to the pivotal testimony of Caroline Ellison, the former CEO of the closely-FTX-tied hedge fund Alameda Research. The one-time employee of and on-and-off ex-girlfriend of Bankman-Fried, Ellison's testimony was lined with bombshells and striking revelations, among them direct accusations that her former boss and lover had instructed her to misuse customer friends, bribe foreign officials, and doctor balance sheets containing multibillion-dollar holes.

This willingness to admit her own culpability, lawyers say, is a difficult obstacle for the defense to overcome.

"It's very difficult for the defense," Jordan Estes, another former Southern District prosecutor, told the newspaper, "when you have a witness in the inner circle who has completely embraced that they have been involved with wrongdoing."

The experts also recalled Bankman-Fried's thwarted attempts to rally his own star witnesses, with the federal judge presiding over the case rejecting a total of seven of the defense's proposed witnesses before the trial even began, according to WaPo.

Another major challenge that could be up ahead? Bankman-Fried's likely turn to take the stand himself. It's unclear if he will, but if the prosecution's evidence continues to mount, a go in the witness chair could be SBF's last Hail Mary — but one that could either come too little, too late, or even give the enigmatic former wunderkind a chance to make new mistakes.

It would "be really, really tough to get through unscathed, when he's on the stand and contradicting a whole ton of evidence that the government has already presented," Samuel Buell, a former federal prosecutor and a law professor at Duke University, told WaPo. "It's very rare that a defendant can turn a case around from the witness stand."

More on the FTX trial: You Have Got to See This Unhinged SBF Memo


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