Source: The Wall Street Journal

Compiled by: BitpushNews irvin Cheung

FTX founder Sam Bankman-Fried (commonly known as SBF) is known for his love of risk, and he is now facing perhaps the biggest gamble of his life: defending his innocence.

The former crypto tycoon has been on trial in New York for nearly three weeks on charges of fraud, money laundering and other crimes, and has watched some of his former colleagues and friends testify as prosecution witnesses. They told jurors that SBF directed a series of criminal activities with "full knowledge" that led to the collapse of the FTX crypto exchange and the loss of billions of dollars in customer funds.

Federal prosecutors will wrap up their trial this week, and based on the current evidence, SBF's conviction is almost certain; but for people like SBF, this "Jedi comeback" scenario may be the moment that inspires him to forge ahead. His defense lawyers believe that they cannot let it go rationally, but judging from the trend of the trial and SBF's limited options, this may be his last chance.

"At this point, it looks like unless SBF does something unexpected, he will be convicted," said Evan Barr, a former federal prosecutor and partner at Reed Smith law firm.

Barr said SBF may have hoped his testimony would win over at least a few jurors and split the jury on the verdict.

In general, lawyers would object to defendants testifying in court, and sometimes even conduct mock trials and cross-examinations of their clients to teach them how their own testimony could go awry when questioned by prosecutors. But Robert S. Frenchman, a defense attorney at the Mukasey Frenchman Law Firm, believes that for defendants with a high profile like SBF, the temptation to tell their own story in the hope of influencing the verdict is particularly strong.

"Such defendants think they are persuasive, and in most cases they are. But they may forget that they are facing a federal judge and prosecutors, and stories and persuasiveness alone are not enough," Frenchman said.

Since the trial began in early October, a string of witnesses have testified that SBF lied to investors and lenders, tampered with the company's balance sheet, and misappropriated billions of FTX customers' funds to purchase luxury real estate, high-risk investments, repay loans, etc. In addition to using customer funds for personal material enjoyment, the witnesses told the jury that the FTX founder also directed the company to make illegal political donations, invested more than $1 billion in celebrity endorsements and sponsorships, and long-term passive attitude towards the holes in the company's balance sheet.

SBF was also portrayed as a callous person. His ex-girlfriend, Caroline Ellison, former CEO of FTX's sister hedge fund Alameda Research, testified that SBF had berated an employee who opposed bribing Chinese officials to get back $1 billion in frozen cryptocurrency. Former FTX CTO Gary Wang testified that SBF had been trying to assure FTX customers that their money was safe, even when he knew he was lying.

Nishad Singh, a longtime friend of SBF and a former FTX executive, said he now felt “betrayed. I and all the employees at FTX have spent five years building something that I thought was good and beautiful, and it turned out to be such a horrible monster.”

The three witnesses have pleaded guilty and are cooperating with the government. They are the core witnesses for the prosecution. If SBF chooses to testify in court, prosecutors will have the opportunity to cross-examine him about their testimony. SBF will need to answer these questions himself, without the advice of a lawyer.

Josh Naftalis, a former prosecutor and partner at Pallas Partners, said that when defendants choose to testify, it means the defense has lost control of the situation. "The defendant can say whatever he wants, and the cross-examination process will be very bad."

SBF has publicly said that he did "make mistakes" in management but did not "commit a crime." In his opening statement at the trial, one of his lawyers said he acted in good faith in trying to save the company from the crisis. SBF's defense may begin as early as October 26, and it is not yet known whether other witnesses will appear in court with him. However, at this point, it is expected that no one else will be willing to appear in court to support his defense. SBF spokesman Mark Botnick declined to comment.

Although SBF's lawyers pointed out some doubts in the testimony of the prosecution's witnesses, they did not seem to have made any breakthroughs in these doubtful arguments. Testifying in court would at least give SBF a chance to explain directly to the jury why he does not believe that fraud was committed.

One reason why SBF testified in court is that his lawyers recently tried to get him prescription Adderall during the trial. A lawyer on the defense team said that without the drug, SBF would not be able to concentrate on participating in the trial process. It is reported that SBF is receiving the requested dosage of the drug from the prison administration.

Although the vast majority of defendants throughout history choose not to testify in court, in recent years some prominent defendants have chosen to defend themselves.

Elizabeth Holmes, the founder of Theranos, was one of them. A jury convicted her last year of four of the 11 criminal charges she faced. A juror told The Wall Street Journal that jurors created a rating system to judge the credibility of witnesses, and on a scale of 1-4, Holmes scored a 2, the lowest of anyone who testified.

In Manhattan, former U.S. House member Stephen Buyer testified in his own defense during his insider trading trial earlier this year. The judge ultimately found him guilty of lying and sentenced him to a longer prison term. "While the defendant has every right to defend his actions, he also has an obligation to tell the truth," U.S. District Judge Richard Berman wrote in sentencing him to 22 months.

Of course, there are also successful cases of defendants defending themselves. In 2021, a Wisconsin State Court jury acquitted Kyle Rittenhouse. Rittenhouse testified that he acted in self-defense because he felt his life was threatened.

Former federal prosecutor Lara Treinis Gatz said that historically, it is still quite rare for a defendant to successfully prove himself. In her 22-year career, she has only seen one defendant successfully prove himself. And in most cases, it is the defendant who finally strikes the gavel to convict them.