As part of CoinDesk's State of Crypto Week presented by Chainalysis, which takes a closer look at the future of crypto regulation in the U.S., St. John’s University law professor Anthony M. Sabino discusses his take on FTX founder Sam Bankman-Fried's criminal trial and the prospects of an acquittal.
Talking about this trial and also taking a closer look at the state of crypto regulation presented by analysis. So, back to the trial, getting a different perspective here. Joining us now to discuss is ST John's University Law Professor Anthony Michael Sabino. Welcome Anthony. So, yeah, good morning, good morning. So, yeah, I'm curious to hear your perspective. I saw some of your notes and I think, you know, I agree with a lot of the points that you raised. I guess the question is, is I'd be curious, I mean, what is going on with the defense? Like, I'd just be curious to hear like a professional opinion because for those of us who have been watching this trial, um we're a bit confused by like just the defense strategy because it seems that, you know, there's a lot of like spicy stuff that you could be getting into the cross examination and they're not really doing that. They're repeating a lot of the same points over and over again. They're kind of annoying the judge. They're real, you know, sometimes they'll repeat something that they said five minutes earlier. So, is this some sort of like, brilliant legal strategy that none of us understand or like what, why is the defense acting this way? Um If it is a brilliant legal strategy, I have yet to ascertain what it is precisely. But like you, I have to agree that I'm kind of surprised. In fact, no, let me be frank. I'm quite surprised at the lack of more melodrama here, for example, with respect to Caroline Ellison, um the cross examination based upon the fine reporting from you and your colleagues, Emily uh indicated that the defense was rather mild with her. I had fully anticipated that they would attack her for the reason of among other things, her personal relationship with Samuel Beckman fried. The fact that again, because of that uh ending of the relationship, she might be out for revenge. But moreover, the fact that she was, as I recall, uh the CO CEO for a period of time at FTX. So therefore, I would have anticipated the defense would try to basically try to shift more of the blame to her and to basically say in, in, in conjunction with that. Well, really, aren't you the person at fault? So you're trying to blame SBF uh I think the fact that as you reported, uh she demonstrated genuine emotion on the stand uh under the prosecution's questioning uh is something that I'm sure the jury took cognizance of and the fact that the defense did not try to sort of return to that area and tried to basically uh uh invoke a more emotional response from her. Uh basically defending her position, her her own actions. I found that a little bit surprising uh similar comments with respect to Mr Shah yesterday again, as I understand from your reporting and your comments this morning, um he basically testified again as you said to the engineering side if you will. But I would have thought that again, a natural question from the defense would have been. Well, sir, ok, if you thought this was wrong, why didn't you refuse to participate? Why didn't you go to the government or an in house lawyer or an outside lawyer sooner? Uh So again, uh the lack of aggression, OK, is, is somewhat mystified. But on the other hand, I have to say in fairness to the defense is this Judge Lewis Kaplan is an experience, extremely experienced jurist, I've appeared before him and I can tell you he was probably among the most no nos sense judges down that he runs a very tight ship and you're correct. Uh If you're raising the judge's ire by being asking repetitive questions and returning to areas of examination that have already been dealt with, OK. That's going to be problematical. You're going to basically get the judge against you. Uh Judge Kaplan with all due respect is not known for his patients. I can assure you from a personal level. What I think is one of the most interesting things that's come out in the last 48 hours or so. Is these hints, if you will, these indications that the defense is saying that uh Samuel Beckman Fried has not been getting his Adderall medication. And that I think uh is uh quite fascinating because what they might be trying to do is say, well, again, the legal point would be if he's not receiving his appropriate medication to deal with his attention attention deficit syndrome or whatever it may be. Uh That means that he can, does not understand what's going on around him. Therefore, he cannot fully participate in his own defense. And they could be trying to position this for an issue on an appeal. Again, assuming again, the man is not acquitted, it's always possible. He'll simply walk out of that courtroom, a free man. Uh But on the other hand, I think they're also trying to build for the appeal. Um Again, I, I, I'm, I'm surprised that there hasn't been more vitriol if you will uh more going after these witnesses on a personal level because it would seem to be the, the classic play or the classic play out of the out of the defense playbook is this is that when you have cooperating witnesses, you attack their credibility, you attack their participation in the scheme, you attack the fact that they have been involved that they've made a deal with the government. So in essence, they're trying to save their own skins and therefore your pitch if you will, to the jury is, you can't believe these people, they're also wrongdoers, they're also malefactors. Ok. They're trying to get out of this with a whole skin or otherwise minimize their time in a federal penitentiary. So that's why they're blaming the defendant. Uh, whereas jury, this is, the defense is saying to the jury, you've got to look at them and basically say what's their true motivation? All right, what, what, how, how can these people be credible if they have basically, and in this circumstance, particularly to, uh to FDX, if these persons have deceived investors, customers, regulators, et cetera, then what makes today different in front of you jury if they've deceived others? Uh Why are, why would you think that they're not attempting to deceive you again in order to save their own skin? You mentioned the potential for an acquittal? And, you know, the reason I keep harping on is the jury understanding what's going on because we have these descriptions of like really long and laborious. You know, how does the cell phone work? What are accounting practices? Is there a chance that at least one juror might say, you know, what, I didn't understand what was going on there and this could lead to acquittal. And how likely is that? Uh It's, I don't want to say it's likely. Ok. But, but, uh I think that was Jennifer. Uh, it's certainly a possibility Ok, we've seen this, that is always the, the problem with these, um, uh, white collar crimes, these complex financial crimes in that you can lose the jury. And again, there's many highly technical issues here. On the other hand, as I mentioned before, the fact that, um, the prosecution evoked an emotional response, a very human response from Caroline Ellison. Ok. I think that's something that the jury as regular people can really grasp on to. Ok. And that might be something that they find persuasive. But once again, there's always that danger. And I can tell you I've been involved in white collar crimes and when it gets into the technical stuff on Wall Street, uh, the jury can be lost. I was involved in one case in particular where the jury was lost and the defendants, uh, uh, walked out. So that's always a possibility. And maybe that's one of the, uh, uh, angles that the defense is playing. They're allowing the prosecution to go forward and so bury the jury be, befuddle the jury with technical issues and jargon, et cetera, uh, that the jury will basically lose sight of the blues track of the ball. And they'll say, ok, well, there's not enough here. So again, that could be something else that they're working on it. It, it could be. But it, it, I mean, doesn't that also work to the prosecution's favorite? Like, look, we have it, uh, you know, we've mashed these peas so much that there's no way you're getting this is going to go through. That's, that's, yes, that's equally so sorry. I didn't mean to step on you, Lawrence. Please forgive me and step away. I mean, people do that all day. You're very kind. You're very kind first thing in the morning. That's the risk that prosecution runs. Uh, I will say again based upon the, the, uh, your reportage, which I've been following closely. Uh, basically, it seems that the prosecution has gone about this in a very deliberate workmanlike manner and, uh, so far so good for them, I would say in that they're putting the pieces together slowly and carefully and again, it's highly technical stuff. It's a lot of jargon. Ok. It's a lot of, you know, Wall Street talk, but they're putting the pieces together, I think in a very understandable way for the jury. Uh, so hopefully the jury, they will again have their eye on the ball, keep their eye on the ball and we'll see where that takes them. But again, the prosecution has to be careful there because if they, if they, uh, laid along too much jargon, too much technical matters, that is, uh, that means the possible loss of the jury. And again, the bottom line is this, we're in America. Of course, thank, thank God. Ok. God bless America. But in America, you're innocent until proven guilty. Beyond a reasonable doubt, the defense does not have to prove in any way, shape or form that SPF is innocent. Ok. They don't even have to prove. He's a nice guy. All they have to do is put doubt in the jury's mind. And if this case becomes overwhelmed by the technicalities of it, that could lead to doubt and that could lead to an acquittal that. But that's a, that's a game that they're playing that, that the, that the prosecutors will trip themselves up. But is the defense doing anything, uh, to, to, uh, sow those seeds of doubt in the jury's mind? It, doesn't it, from what I'm gathering, it seems almost like they've given up. No, I wouldn't, I wouldn't say that because you never know. I mean, they could be playing the long game, uh, and so on and so forth and once again, there's, there's no telling if they, if they do decide to put SBF on the stand, which again is highly dangerous. Ok. Extremely risky. I'll return to that in a moment. But for example, as you pointed out Lawrence, uh, yesterday, with respect to Mr Singh, uh, uh, I should say Emily mentioned this. Pardon me is the fact that, um, they basically went after him on supposed inconsistencies in things that he told the FBI agents and things he said on the stand now very quickly with that process, that's what we call Brady. Material. Witnesses are interviewed by the government. The government takes notes. Those notes have to be turned over to the defense. So basically what Mr Cohen, I think it was yesterday was trying to do is saying, ok, Mr Singh, you said a to the FBI in an interview a year ago and now today you're saying something else and all Mr Cohen has to do on behalf of the defense is basically say that in essence, what he's saying to the jury is this gentleman said one thing on one day and now he's saying something to you on the other day, you don't need to decide which is the more accurate accounts. You don't need to decide when he's telling the truth. All you need to know is on one day, he said something that he wants you to believe on another day. He said something that's inconsistent with that. So that means he can't be trusted. That's an attack on his credibility. And once again, as we've been pointing out this morning, they were doing that they were making some inroads yesterday with Mr Singh. I really, again, my perception of your reporting is that they really didn't do that with Caroline Ellison. And I was very surprised at that because I thought again, as one of the leading witnesses, I think she was number two in the queue. The bottom line was I really expected a full blown attack against her and I haven't seen it. Maybe, maybe they're waiting for more again as we see more of the professionals coming on the technical side, what the losses were, maybe they're going to attack the technical analysis and say that what happened at FTX was inevitable due to market conditions. It really was not an improper shifting of custom funds. It's been alleged so on and so forth. So maybe again, I still think these, the defense has a few arrows in the quiver. Let's see if they shoot them off and if they land on target, Anthony, thanks so much for joining us this morning and providing that insight and analysis. It was a pleasure. Thank you very much. It was a pleasure as well. Good fortune. That was Saint John's University law Professor Anthony Michael Sabino.