FTX' Bankman-Fried Argues He Had No Intent Of Committing Crimes

FTX founder Sam Bankman-Fried stuck to a common refrain ahead of his indictment on fraud and conspiracy charges, saying bad decisions and lack of oversight led to the collapse of the crypto exchange and that he didn't commit or know of any wrongdoing, the Wall Street Journal reports. If his case goes to trial, his lawyers are likely to make the same argument. To win a conviction, prosecutors will need to rebut that narrative and prove that Bankman-Fried knowingly and willfully broke the law, former federal prosecutors and defense attorneys say. “You can’t accidentally commit a crime,” said Andrey Spektor, a former prosecutor now at law firm Bryan Cave Leighton Paisner. The U.S. Attorney in Manhattan charged Bankman-Fried with stealing billions from FTX customers while defrauding lenders and investors before the company’s collapse in November. He faces eight counts, including wire fraud and conspiring to commit securities fraud. Bankman-Fried, 30, was arrested in the Bahamas. While the U.S. seeks his extradition, he was denied bail and sent to jail until his next scheduled court appearance in February. Bankman-Fried has tried to explain the reasons for the demise of FTX in several public appearances and interviews. “Clearly I made a lot of mistakes or things I would give anything to be able to do over again,” he said at the New York Times DealBook Summit. “I didn’t ever try to commit fraud on anyone.” It’s a familiar explanation from executives facing criminal charges. At the trial of Theranos founder Elizabeth Holmes, her lawyers portrayed her as a well-intentioned if inexperienced entrepreneur. Holmes testified she never tried to mislead investors about the blood-testing startup. Federal prosecutors said that she forged reports provided to some investors, and former Theranos employees testified that she dismissed warnings about questionable test results from the company’s lab. “The classic defense argument is, ‘My client is a bad businessman but he’s not a criminal. He didn’t intend to defraud or cause any harm,’” said Timothy Howard, a former federal prosecutor. Prosecutors said Bankman-Fried’s deception helped cause the company’s downfall. Their challenge will be taking jurors through his mindset and demonstrating that the FTX founder knew what he was doing was wrong. They intend on using communications, including emails and texts, as evidence to show a defendant’s alleged crimes were intentional. They may also use his own statements. “So much of what is in the defendant’s mind has been shared by the defendant himself,” said Justin Danilewitz, a former federal prosecutor. “He hasn’t left much a secret.”