FTX’s Sam Bankman-Fried Takes The Stand: Why Is One Missing Document So Important?

FTX founder Sam Bankman-Fried (SBF) testified on October 26 as expected. His testimony provided a glimpse of what line of argument is to be expected from the defense as the case progresses. As Bankman-Fried’s lawyers questioned him, they emphasized on a particular document that could be the key to exonerating the defendant. 

Why This FTX Document Is So Important

According to a post by Inner City Press, which live posted happenings at the trial, Bankman-Fried’s primary counsel, Mark Cohen, had questioned the defendant about a ‘Document Retention Policy.’ In reply, SBF mentioned that the policy had been drawn up by the law firm Fenwick and West and, more specifically, Dan Friedman. 

From Cohen’s questions and SBF’s testimony, it was pretty clear that the defense was trying to rely on the policy to justify why some correspondence between the defendant and his former associates was on auto-delete, as earlier revealed. Bankman-Fried mentioned that informal chatter on Signal (a platform on which they communicated) could be set to auto-delete in line with the policy. 

He had earlier justified while there was even a need for auto-delete when he stated, in reply to Cohen’s question about using Signal, that encryption was important because FTX had been hacked in the past and that it was a measure taken in order to avoid any data leak or even the possibility of a former employee selling data to a competitor. 

In an attempt to justify any wrongdoing, Bankman-Fried mentioned that he believes that he acted in accordance with the policy, especially considering the fact that Signal was only used for informal chatters and such correspondence could be deleted at any time since they didn’t form part of formal decisions taken by the company. 

Despite the importance of this document to their case, SBF’s lawyers, however, mentioned that they haven’t been able to access it and that the law firm Fenwick and West hasn’t produced it because they haven’t been able to issue a subpoena against them. 

Maybe Getting Sam Bankman-Fried To Testify Was A Mistake

Before now, it had been argued that it was important for Sam Bankman-Fried to testify in his case following the overwhelming evidence that the prosecution had so far produced against him. 

It was believed that his testimony could help swing a part of the case back in his favor. However, it would seem that SBF testifying could do more damage to his case following the way he folded on cross-examination. 

As noted by Fox Business Journalist Eleanor Terrett, Bankman-Fried seemed to lose his composure the moment the prosecutor began cross-examining him. While he boldly made some assertions on direct examination, he vaguely answered questions put forward to him on cross-examination, mainly replying with phrases like “I’m not entirely sure,” “I don’t recall specifically,” and “Contemporaneously.”