Bankman-Fried Is a ‘Master of Deflection,’ Securities Lawyer Says

James Murphy said the FTX founder has used his interviews with the media to say falsely that his actions weren't intentional.

AccessTimeIconDec 5, 2022 at 7:11 p.m. UTC
Updated May 9, 2023 at 4:04 a.m. UTC
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Former FTX CEO Sam Bankman-Fried’s attempts to change the narrative won’t prevent his imminently unavoidable day in U.S. court, said James Murphy, former founder and chairman of financial-services law firm Murphy & McGonigle.

“What he’s trying to do is creating narrative that he didn’t do anything wrongful with intention, because that’s what gets you prosecuted criminally,” Murphy said on CoinDesk TV’s “First Mover” on Monday.

Bankman-Fried is coming under fire for his attempts at using the media to form his own version of events. That comes as crypto exchange FTX faces bankruptcy proceedings after a CoinDesk report revealed that Alameda Research, an affiliated trading firm that Bankman-Fried also owned, held substantial amounts of FTX’s native token, FTT, on its balance sheet.

A con game

“He wants to position himself as super transparent about everything that happened at FTX and Alameda, and he’s been anything but that,” Murphy said in reference to Bankman-Fried's series of interviews.

“He is a master of deflection, and you see this often with con men who really believe they can convince the world of what they’re saying,” Murphy said.

Despite Bankman-Fried’s attempts at being “transparent,” the disgraced CEO isn’t actually answering reporters’ questions, according to Murphy. Last week, New York Times columnist Andrew Ross Sorkin probed Bankman-Fried, albeit with a significant number of “handicaps,” in place.

“Sam Bankman-Fried was not under oath. He wasn’t even in the same room, so you can’t really cross-examine him,” Murphy said, adding that although Sorkin asked a number of questions Murphy would have asked, Bankman-Fried continued to deflect.

“He would simply answer a completely different question,” Murphy said.

Bankman-Fried, whose media appearances has gone against the advice of his attorneys, could be facing criminal charges if a court determines that he was intentional about mishandling customer funds. So far, however, Bankman-Fried has been “careful” about his responses, which Murphy said is an attempt to portray his actions as “negligence rather than intentional wrongdoing.”

‘Solid’ case

The Bahamas-based exchange could be in violation of U.S. law, considering that its collapse affected U.S. citizens and that FTX’s terms of service were “quite clear," Murphy said.

“If you send money to an exchange and that exchange says, ‘We will hold your money. It's your property. We will not exercise any dominion. We won’t take your money and invest it in some way or give it to a third party.’ That's fraud,” Murphy said.

“The case is quite solid,” he added, noting the amount of of evidence already made public, including the affidavit from FTX replacement CEO John Ray III and the “special software” that was deployed in hopes of obscuring transaction activity, is a “real telltale sign prosecutor's love to show.”

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Fran Velasquez

Fran is CoinDesk's TV writer and reporter.


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