Sam Bankman-Fried defense rests in FTX criminal fraud trial

The defense for FTX founder Sam Bankman-Fried wrapped up its case Tuesday in the crypto billionaire's criminal fraud trial. Closing arguments and jury deliberations are set to begin Wednesday. File photo by Louis Lanzano/ UPI

Oct. 31 (UPI) -- The defense for FTX founder Sam Bankman-Fried rested its case Tuesday in the former crypto billionaire's criminal fraud trial, with closing arguments and jury deliberations scheduled to begin Wednesday.

Bankman-Fried, 31, who is charged with seven criminal counts including securities fraud, wrapped up three days on the stand Tuesday morning. The defense rested its case just before noon and the jury was sent home.

If found guilty on charges stemming from the collapse of FTX and sister hedge fund Alameda Research last year, Bankman-Fried could face life in prison.

During testimony Tuesday, Bankman-Fried appeared irritated and on several occasions was admonished by Judge Lewis Kaplan for not paying attention.

Assistant U.S. Attorney Danielle Sassoon questioned Bankman-Fried's relationship with the prime minister of the Bahamas, which was home to FTX. Specific questioning focused on Prime Minister Philip Davis's trip to Miami and courtside seats to a Heat basketball game at FTX Arena.

Bankman-Fried frequently skirted the prosecution's questions, saying he "did not know" or "could not remember." He was asked if he had proposed paying off more than $11 billion in national debt for the Bahamas. He was asked about FTX opening up customer withdrawals only for Bahamians. And he was asked about the $8 billion shortfall in FTX's balance sheet.

The government has accused Bankman-Fried of carrying out a plot to withdraw billions of dollars of customer funds from the FTX exchange for his personal use.

During tough questioning Monday, Sassoon attempted to show -- through a series of contradictions -- how the FTX founder allegedly made false statements about his companies' practices.

Prosecutors allege the cryptocurrency founder provided Alameda with a $65 billion line of credit, far more than any other FTX user.

"Isn't it true that most customers of FTX didn't have a line of credit?", to which Bankman-Fried replied, "Yes."

Last week, FTX co-founder Gary Wang testified that Alameda's borrowing ability was set up to be drawn from profits generated by FTX. By 2020, Wang said Alameda had resorted to tapping into customers' accounts to cover its losses.

In his defense, Bankman-Fried told the court he made "a number of small mistakes and a number of larger mistakes," calling his failure to hire "a dedicated risk management team," his biggest mistake.

"We didn't have a chief risk officer," Bankman-Fried said. "We had a number of people who were involved to some extent in managing risk, but no one dedicated to it, and there were significant oversights."

Bankman-Fried and his defense are banking on claims that the withdrawal of customer funds out of FTX -- to cover Alameda's losses, buy expensive real estate in the Bahamas, and finance the naming rights for FTX Arena in Miami -- were unintentional and that the crypto billionaire should not go to jail.