On Wednesday, the prosecution in Sam Bankman-Fried’s fraud trial showed jurors a string of obscene communications he wrote media complaining about regulators, calling into question the FTX founder’s image as a supporter of cryptocurrency supervision.
Bankman-Fried’s attorneys objected, but U.S. District Judge Lewis Kaplan overruled them and let jurors in Manhattan federal court to view a vulgar message he wrote to a reporter for the news website Vox days after FTX crashed in November 2022, arguing that regulators “make everything worse.”
Jurors also observed a profanity-laced message written by Bankman-Fried to a journalist for the crypto news site The Block on Twitter, the social media platform now known as X, in which he made a reference to US SEC Chair Gary Gensler.
Bankman-Fried said in the communication that US politicians were “dumb” and “about to hand the industry to Gensler on a silver platter.” In cryptocurrency circles, the SEC is seen as more unfriendly to the business than another federal body, the Commodity Futures Trading Commission.
Bankman-Fried is charged in the trial, which began on October 3, of stealing billions of dollars from FTX client accounts to make investments, give to US political campaigns, and prop up his hedge fund, Alameda Research. Prosecutors claim his political contributions were intended to support cryptocurrency-friendly laws.
The ex-billionaire has entered a not guilty plea to two counts of fraud and five counts of conspiracy. If convicted, Bankman-Fried, 31, may face decades in jail.
Bankman-Fried’s attorneys had asked the judge to prevent prosecutors from presenting the chats with the Vox reporter as evidence, claiming that the defendant sent the “off-the-cuff musings” after the time period at issue in the trial and that the language would bias the jury against him.
Prosecutor Danielle Sassoon argued for allowing the jury to examine the texts, saying they were “highly probative” of his genuine state of mind at the time, noting that Bankman-Fried subsequently told the reporter he assumed the chat was off the record. The messages were eventually published by Vox.
Bankman-Fried stated that his previous views in support of bitcoin regulation were “just PR,” or public relations. “It doesn’t reflect his honest intent at the time when he was engaging with regulators,” defence lawyer Christian Everdell said outside the jury’s presence, arguing that the texts should not be included as evidence.
Prosecutors have stated that their case might be dismissed as soon as October 26. Bankman-Fried’s solicitors have stated that he may testify in his own defence.
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