Sam Bankman-Fried set to take the stand Friday morning

Analysis by Allison Morrow, CNN

New York (CNN) — FTX founder and former CEO Sam Bankman-Fried has made a career out of risky bets that, for a while, paid off. Now, he’s about to make the riskiest bet of his life.

After three weeks of damning testimony portraying him as a criminal mastermind, the former crypto billionaire took the stand on Thursday afternoon to try to convince jurors that, far from a fraud, he is just a clumsy startup founder who got out over his skis.

The only problem is — there were no jurors to convince.

Clad in a gray suit and lavender tie, Bankman-Fried barely got to test his microphone before Judge Lewis Kaplan announced that jurors would be sent home for the day.

Federal prosecutors have objected to some of what defendant had planned to speak about, and so Judge Kaplan asked that Bankman-Fried first give testimony to him, in court, outside the presence of the jury. Kaplan will then determine whether that testimony can be repeated to the jurors.

Bankman-Fried testified to Kaplan that FTX and FTX and Alameda relied heavily on encrypted apps like Signal to protect against “constant attempts to hack FTX.” He said he believed that using those apps’ auto-delete policy was proper because conversations on Signal were meant for chatter rather than as a setting to discuss formal policies or to share business records.

He added that as the company grew, FTX’s chief regulatory officer, lawyer Dan Friedberg, helped develop data retention policy. Formal business decisions, he said were not deleted.

Judge Kaplan interrupted Bankman-Fried to ask “one thought that readily occurs: where’s this policy?” Bankman-Fried and his lawyer Mark Cohen did not answer about whether this policy was formally written anywhere.

The judge scolded Bankman-Fried and his lawyer multiple times during questioning for being evasive and ignoring questions. “Part of the problem is that the witness has what I’ll simply call an interesting way of responding to questions,” Kaplan remarked after Bankman-Fried failed to answer a question about whether he had known about Alameda Research’s negative balance on its FTX accounts in May 2022.

The Thursday ruling came after defense presented two witnesses, Krystal Rolle, the Bahamian lawyer who represented Sam Bankman-Fried after the collapse of FTX; and database expert Joseph Pimbley.

What’s next for the jury

The jury was ordered to return Friday morning, and Kaplan said he hopes to hand the case to them early next week. Bankman-Fried is set to testify before the jury on Friday.

Either way, a defendant testifying is not something you see every day in a criminal trial.

Typically, defense attorneys advise their clients not to testify because it leaves them vulnerable to grilling by the prosecution. Stumbling on the stand, the thinking goes, is worse than saying nothing at all.

But at this point, Bankman-Fried doesn’t have much of a choice, legal experts say. Prosecutors have made a compelling case that has been difficult for the defense to chip away at.

Normally, you might expect the defense to lean on witnesses who can offer a favorable counterpoint. But Bankman-Fried, who has pleaded not guilty to seven criminal counts of fraud and conspiracy, doesn’t appear to have any allies left who can dispute what members of his inner circle have already said under oath.

“This is the one last final desperate throw of the dice for him,” said Howard Fischer, a partner at Moses Singer and a former SEC attorney. “I don’t know how many other options he has.”

How we got here

Bankman-Fried’s attorneys have a monumentally difficult job ahead.

“They need to make him sympathetic,” Fischer said. “Obviously, the facts are important. But people make decisions about people, in some part at least, based on whether they like them or not.”

Bankman-Fried has to not only be likable, “he also has to convince the jury that, to the extent that there was wrongdoing, other people are responsible for it, not him,” Fischer added.

That’s one area where Bankman-Fried may have an edge.

Before his world came undone last year, Bankman-Fried was a rising star, even outside the insular world of crypto. With his wild hair and schlubby T-shirt-and-shorts uniform, he managed to charm an array of deep-pocketed investors, A-list celebrities, journalists and members of Congress. (In one memorable exchange on the Hill, Senator Cory Booker quipped to Bankman-Fried that he was offended that the young entrepreneur had “a much more glorious afro than I once had.”)

That image may have been part of a carefully crafted PR play, according to Caroline Ellison, the prosecution’s star witness and Bankman-Fried’s ex-girlfriend. It nonetheless helped to propel his star power and secure a $32 billion valuation for FTX.

Bottom line: SBF needs a Hail Mary to have any chance of winning over the jury. His decision to testify is an almost poetic plot twist for a man whose seemingly insatiable appetite for risk — not to mention an insatiable need to broadcast his story to anyone who’ll listen — landed him in federal court in the first place.

—CNN’s Nicole Goodkind contributed to this story.

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