Days before Sam Bankman-Fried’s crypto exchange FTX collapsed in November 2022, he tweeted his support for regulation that protected customer deposits.
In encrypted messages, he was saying: “F*** regulators.”
Those public and private faces of Mr Bankman-Fried came into sharp focus as he faced intense cross-examination at his fraud and money laundering trial in Manhattan on Monday.
Assistant US attorney Danielle Sassoon quizzed the 31-year-old former billionaire about public statements on social media and in media interviews in which he portrayed FTX as transparent, safe and trustworthy.
Answering in stilted “yeps”, “yeahs” and “No, but I may haves,” he was at times evasive and defensive about the apparent discrepancies between his public and private claims.
He testified that he had conducted thousands of interviews, and that he had did a “good job” with the press, but struggled to remember specific details until confronted with them as the government put them into evidence.
“Mr Bankman-Fried, would you agree that you know how to tell a good story?” Ms Sassoon asked him.
“I don’t know, it depends on what metric you use,” he responded.
Ms Sassoon put it to Mr Bankman-Fried that his statements on the protection of customer assets were a public relations ploy.
“In private, you said things like ‘f*** regulators’”
Mr Bankman-Fried replied that he “said that once”.
Sam Bankman-Fried has denied intentionally ripping off FTX customers
(REUTERS)
Prosecutors have accused Mr Bankman-Fried of using a secret backchannel to funnel around $15bn from FTX’s customer funds to support risky bets by Alameda Research, invest in high-end real estate, fund sponsorship deals and make political contributions.
Mr Bankman-Fried owned both and allegedly controlled companies, but has tried to shift the blame for the collapse on to his one-time girlfriend and Alameda CEO Caroline Ellison.
Ms Ellison, who pleaded guilty to her role in FTX’s collapse, has previously testified that SBF’s image as a floppy-haired “effective altruist” was an act.
The former crypto wunderkind’s use of social media to grow the business organically was also probed in exchanges with the prosecution on Thursday.
Ms Sassoon asked how he interacted with customers on Twitter, essentially using the platform as a free marketing tool, and contrasted it with his private conversations.
Mr Bankman-Fried admitted calling “crypto Twitter”, a passionate online community of blockchain and cryptocurrency enthusiasts, “Dumb motherf***ers”. He insisted the insult was only directed at a “subset” of crypto Twitter.
He also admitted publishing a Twitter thread on 22 October 2022 trying to shore up confidence with FTX customers, but admitted he failed to mention an $8bn liability it had with Alameda Research.
In earlier testimony, Mr Bankman-Fried said he had made mistakes that hurt a lot of people but denied intentionally defrauding anyone.
He was also quizzed last week by prosecutors without the jury present as Judge Lewis Kaplan worked out which evidence was admissible.
In court, Mr Bankman-Fried wore a grey suit and tie and a freshly-cropped haircut.
Mr Bankman-Fried has pleaded not guilty to seven counts related to fraud, conspiracy and money laundering.
He faces up to 110 years in prison if convicted.
