Sam Bankman-Fried Taking the Stand Was a 'Huge Mistake,' Lawyer Says

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. Sam Bakeman Fried is set to face a cross examination by federal prosecutors today after doubling down on the narrative that f failed due to mistakes. Joining us now is Hotter law firm founder Sasha Hotter. Welcome back to the show, Sasha. Hey, thanks for having me this morning. All right, a lot has gone down and the Sam Bateman freed a criminal trial. What do you think of Sam's testimony on Friday in front of jurors? Was it compelling? I don't see how a juror could be convinced by Sam Ban and Fried's testimony. You know, as soon as he opened, he tried to correct the narrative. He came in. They asked, did you defraud anyone? He said no, they said, did you take any customer funds? He said no. And you know, we just weeks of evidence of him taking customer funds. So I don't know how he can sit there with a straight face and say that, you know, he admitted that he made a number of small and large mistakes and his biggest mistake was not having a dedicated risk management team. But you know, we'll, we'll see how the jury looks at it. He really tried to distance himself from the allow negative code saying that um Gary Wang and uh Nisha Singh had authority to, to make actions without consulting with him. And, you know, he explained away Alameda the fact they had seven different balance sheets. Uh just by saying, you know, they, this accounting bug created an $8 billion hole. It wasn't his political donations. He thought it was just an accounting bug. So, you know, he's, he's gonna just try and he tried and I think Friday went fairly well for him compared to how it's gonna go today and tomorrow. But he, you know, he had his own attorneys asking him questions. They were all very practiced responses and him trying to distance himself from the, the criminal intent element. Sasha, I've asked almost all of our legal experts who have come on the show this, what's the likelihood, what are the chances that he's able to convince at least one juror given his testimony so far? I would put it at zero. I can't speak for the jury, obviously, but he does not convince me of anything. And I just think, you know, any reasonable person is going to sit there and see him as the, you know, egomaniac fraudster that, that he is just the fact that he, he takes the stand in his own criminal trial or that we're even at trial to begin with and wasting everyone's time for, you know, several weeks like this when he was probably offered a deal and everyone around him took deals. But he, he thinks he can get off. You know, he's just got this way of thinking that he's above the law and he's the smartest guy in the room and he can convince anyone of anything. But if you listen to him talk, um, you know, I went back and I listened to some of those old Twitter Spaces and he's, he's not very articulate and he's his answers with conviction that I think will convince any juror. So this sounds like you think this is a mistake. I think it's a huge mistake for him to have taken the stand and it sure, you know, he might have been able to humanize himself a little bit on Friday in front of the jury with, with his own, you know, distancing himself from that fraud narrative, but taking the stand opens himself up to today's cross exam. And I think he's just going to get skinned alive by these seasoned prosecutors who, you know, they're not the people on Twitter Spaces who were asking him questions last November. These are people who have spent their career learning how to get someone to admit criminal intent. And he's got, you know, they've got a million pages of discovery of his scripts of everything he said. So he can't lie or it's gonna be noticed and under pressure his, you know, he, how's he gonna answer these questions for two days straight? Of just drilling him about what happened? Um, I think he's gonna get flustered. He's gonna start like showing his tics, he's gonna start mouthing words before answering them and he just looks very, um, like he's gonna look guilty and it's not gonna be good for the jury and, and the judge too doesn't seem to have much sympathy for him. Judge Kaplan is a nonsense kind of guy and when SBF goes into these big long evasive answers where he just poses more questions, like he just really doesn't say anything when he talks. Um, I think it's gonna really annoy the jury and the judge last week, the judge sent the jury away. Sam had a chance to testify just in front of the judge and we saw a cross examination there that was very similar to what you just described. Do you think that could be a benefit to him? Almost like a practice run? He may be able to work on some of those ticks and some of those answers? Yeah, certainly. It was, it was kind of bizarre for him to get a whole day of this, like, practice mock trial kind of situation. But, uh, from what I read, he used the time to try and blame everything on others, especially his former in house counsel Daniel Friedberg. And you can't that defense of counsel defense up unless you notice it properly ahead of time and you give the government, you, you waive your attorney client privilege by doing that. So I think that's where he thought he could go with it, which is a real amateur kind of thing. Oh, I'll just blame my lawyer. But the case, you know, he's got this lawyer. Daniel Friedberg, not funny, but like the Daniel Friedberg was at the center of the ultimate bet scandal a decade ago and he was allegedly caught on camera advising ultimate bets that it was ok to code in a cheat that led to ultimate bets stealing a ton of money from all their customers. So, you know, I'm kind of surprised they didn't go with the defense of counsel here because if the jury knew about Daniel Friedberg history with ultimate vets, they could possibly believe that Friedberg actually knew about this allow negative code and was bribed or paid off enough to look the other way or advise how to, how to hide it, you know, and, uh, if they could get that shown then then SBF could get off. But, but it's, it's not coming in and the jury is not gonna care about that. Yeah. And that, and that's an interesting, uh, ultimate bets. Of course, is where I, I believe Stuart Honer was, wasn't he involved with that? The, the fellow from Tether? Um, I just don't agree. Yeah, there was, uh, yeah, it was, uh, it's an interesting, it's an interesting connection. All of them have just saying, just saying there's no, there's no, no sketchiness whatsoever. Um, but do you think that this was all nonetheless a situation where do you think Sam pushed for himself to go on the stand or do you think that his lawyers just are awful? Which I totally think he pushed to have trial to begin with. And he's the one that pushed to get on the stand. I can't imagine his lawyers thinking this is a good idea. But in criminal law, the lawyers aren't allowed to take away the chance for a, a defendant to, to try and paint their picture or tell their side of the story. But the, the fact that they have by taking the stand, they're open to cross exam. You know, everyone, usually, uh, criminal defendants don't take the stand for the reason of what's about to happen today where they're gonna get questioned and cross examined. And, um, usually, you know, usually the prosecutors are able to prove their side pretty easily with a criminal defendant because they have all this experience of how to ask the right questions and how to lead the person down this path to, to self destruction. Sasha, you're focused on helping crypto entrepreneurs navigate the regulatory landscape in the United States. Has this case changed the way you advise your clients? Yeah. Well, I think this case, you know, I'm excited for it to wrap up and for it to, to be put Behi behind us because I think it just, it made the whole industry look bad. It, it created a lot of negative attention. It, I don't know if this particularly is what caused this operation. Choke 0.2 0.0 but no one will bank a lot of crypto companies anymore. And that's very detrimental to someone trying to do business and they're having to go to these international banks or there's a few still left in the US. But it really took a, took a big chunk out of the industry, losing all of its banking relationships. And I, I blame Sam for that largely if we, if we step, yeah, but if we step back a little bit, it's not just Sam. Right. It's the dow, it was the big connect folks. It was Mount Gox, et cetera, et cetera. I, I mean, like we step back and we look at this and it's scandal and fraud and, and mischief left and right at what point is, is part of the problem. First of all that, after 12, 15 years of this, that we haven't seen massive adoption of crypto or, or significant adoption of crypto that the only thing that survives or the only thing going around right now is a lot of hot air. Number one, number two is it is another problem that, you know, why are, why are such shady characters, you know, we always say there are shady characters everywhere. Yes, they, they criminals use fiat all the time, but it just seems like there's such a collection of like the batman villains doing this. What's going on? Well, you know, I, I heard you before coming on saying that you thought a lot of the pump in the price even could be due to, you know, my insinuation of what you said is like, maybe Hamas is buying a lot of Bitcoin and that's where the pressure is coming from and it's not coming from an ETF and, and, you know, like that, it's like it has to be around, it can also be around, I'm buying it on their behalf. You know, they have a big, a lot of Bitcoin accounts those and I, I think that was disproven or at least Nick Carter has been taken to Twitter the last, you know, week saying these numbers are wrong chaly showed it wasn't used for these terrorist activities in the scale that it was originally reported. And, you know, so I'm a big believer in Bitcoin and I, you know what you say? Oh, I don't like the Bitcoin bros and I, I kind of consider myself in that camp, I guess. So I, I think all these, it's been a lot of shady characters. You're right, like the dow and everyone in all this crypto, but there's still a core difference between the, the crypto lending and the, the kind of, um, all coin Bonanza and defy markets and everything compared to actual Bitcoin, which has a lot of merits and can help a lot of people. And, uh, you know, it's got this ETF coming and might be, I think that's what's driving it is that all of a sudden we're, I see a lot of these investment advisors being able to buy it for their retail clients, which hasn't been something like it. Once an ETF is approved, it's, it's not no longer something that's in the shadows. It's just another normal and valid asset class. So I think maturity is what will uh shake out a lot of those bad actors, Sasha. We are going to have to wrap it there. We're running out of time, but thanks so much for joining us this morning. It's always a pleasure having you on the show. Thank you. That was hotter law firm founder Sasha. Hotter