Photo-Illustration: Intelligencer; Photo: Getty Images
On Friday morning, the trial of U.S. v. Samuel Bankman-Fried started with a surprising admonishment from Judge Lewis Kaplan. The day before, the defendant had given testimony in his own defense without the presence of a jury. It was part of a rare kind of legal dry run about whether certain topics — namely, the advice of FTX’s former lawyer — would be admissible. One of the lead attorneys for the government, though, raised an issue with Kaplan over the “noises and gestures” of the onlookers in the courtroom. “I would just ask the Court to give a general reminder that those sitting through the direct and cross should control their visible reactions, whether audible or physical, to the testimony,” said Danielle Sassoon, the prosecutor. Perhaps this was a reaction to Liz Lopatto’s report about SBF’s mother, Barbara Fried, sitting “with her head in her hands.” Another colleague mentioned that Michael Lewis, who had swung by for the testimony, was at one point hiding his face. Either way, Judge Kaplan agreed. “And if there are infractions,” he said, “people will be removed.”
Nobody tell Judge Kaplan about the overflow rooms. I have not been inside his courtroom since October 10, when Caroline Ellison first came on the witness stand. Not only am I not so fastidious, I have accepted that I am a creature of the occasionally loud, often rollicking courtrooms a little bit lower down, on the 23rd and 24th floors. The overflows are something like the back row of a school bus, where the rules are a little bit more negotiable out of sight from those who make them. I overheard a crypto influencer who once interviewed SBF brag that she was able to vape under her jacket during the first week. Another overflow denizen, this guy Taco, was taking side bets on how many times the government would raise objections. (He took the over on 47. I counted 63 from Sassoon on Friday alone. When I asked who took the other side of the bet, he raised his hand as if to say you think I’m going to tell you?) Some guy next to me had his cool mint Zyn nicotine pouches out on the bench. Honestly, it is great. These rooms — filled with crypto die-hards, lawyers, interested normies, and disinterested weirdos — are closer to a real-time studio audience, and they’re where the real action is.
The overflows are an inevitable consequence of the physical limitations of the court. In room 26b, where Judge Kaplan actually holds the proceedings, there are 21 spots reserved for the public crammed into three hard, wooden benches. In order to keep track of who should get those seats, we in the media have been keeping a first-come, first-served list. There is always more demand than supply. The most high-profile days have produced four or five times the number of spectators. When SBF’s lawyers announced on Wednesday that he was going to take the stand, a race ensued — arguably kicked off by this tweet by CoinDesk editor Nikhilesh De, begging people to not show up at 3 a.m. Well, that didn’t happen. On Friday, the first three who showed up happened to be the groovy, sun-kissed California reporters whose brains still click on Pacific Time: The Ringer’s Katie Baker — who arrived around 1 a.m.; Lopatto; and the New York Times’ David Yaffe-Bellany.
Most of the time, the reporters in the overflows are diligently doing their jobs, writing down what’s being said, occasionally making a trip outside to file a report. Sure, there would be reactions here and there, but they were muted. Maybe it’s the sense of camaraderie, or just finally feeling comfortable in the courthouse by now, but SBF’s time in the witness box changed all that. It was clear from the first moments when SBF took the stand on Thursday that he would not be an easy witness for himself. He has been answering questions like a boring Laurence Sterne, in long sentences that rush out of his mouth and are otherwise evasive, contradictory, recursive, and self-interrupting. This makes it exceptionally difficult to take accurate notes in real time because — what is it that he’s even saying? At one point Thursday, Sassoon produced a contract between Alameda Research, SBF’s hedge fund, and FTX, his exchange. She asked SBF whether he believed that it authorized Alameda to spend an unlimited amount of FTX customer money. There was a long ten seconds or so of silence. Then, per the transcript, he responded:
So I should preface this by saying I’m not a lawyer. I’m not giving a legal interpretation of this. I’m just giving, as best I can, what my memory is. And the parts of this that jibe with that, I, you know — I’m not trying to give a definitive legal ruling on what this does or doesn’t say. The — I’m not sure that I would quite answer yes to the question as you most recently phrased it. I’m going to try as best I can to give the answer that I believe, which is that the — as — at least as I remember understanding it at the time, FTX either itself or I think as actually happened, without FTX as an intermediary, customer’s fiat funds would be sent to Alameda bank accounts, FTX would retain a — effectively a debt from Alameda for those and a — in the lien section here, a lien on Alameda’s assets as security for that ongoing liability, that it would be repayable on direction from FTX in the return section here, and — and in the payment directive section.
It was at this point the overflow room just about lost it, at least from the decorous standards of the court. At SBF’s need to remind the judge he wasn’t a lawyer, there was scoffing, even outright sneering. A reporter in the jury box put both hands on her face and stared bug-eyed into the ceiling— like dear God is this bad. At another point, SBF chose to answer a question about safeguarding customer assets from embezzlement — over a sustained objection. “You didn’t have to answer if it has been sustained. Haven’t you been sitting here for four weeks?” his lawyer, Mark Cohen, asked him, in what was not a happy tone of voice. “I felt the need to answer that one,” the defendant replied. I was far from the screen, but it looked to me like SBF was smirking. I admit that, at that point, I closed my notebook and also held my head in my hands, overcome with second-hand embarrassment. Afterwards, when the overflow gang was waiting for the elevators, the word I heard most often was “painful.”
Recounting these reactions is a little bit like reading a Victorian-era scandal sheet, but keep in mind that these are the only unfiltered, immediate emotions that I, as a reporter, can go on. From my vantage point, I cannot see the jury, and I admit that the overflow is probably a weak proxy for the 12 people who will decide SBF’s fate. Every single reporter and onlooker there would have probably been struck from the jury. Not only do we already know SBF’s story, when we hear it again, we listen for the arguments that undermine previous assumptions or the ones that elevate biases with a surprising flourish. Jurors who have never heard of SBF, or only had the vaguest notion of him, only know the persona created for him by more than two weeks of witnesses for the prosecution. They know him as a billionaire crypto guy who hung out with Tom Brady, made lots of political donations, and had some kind of connection to Thai prostitutes. All that matters is what the jury thinks, and that is something we don’t know in the slightest — except if you can glean something from the one or two who have dozed off during the course of the trial. Still, I don’t think that those in the overflows are all that different from the jurors, and when we hear evasive, vague testimony, it is universally frustrating.
The good news for SBF is that his Thursday disaster on the stand occurred after the jury had been sent home. It also appears that he is getting something of a second chance to keep his testimony from going that badly again. On Friday, the reaction from the overflow room was mostly boredom. For one, the questions all came from his own lawyer. There was nothing as dramatic to react to.
The bad news, though, could haunt SBF. For one, Kaplan ruled he wouldn’t allow most lines from the Thursday testimony where SBF was blaming his lawyer Dan Friedberg for advice, in large part because it didn’t meet the requirements for that kind of defense. But the prosecution still gets to use that testimony as part of its cross-examination, as if it were a deposition. (Cohen could have objected to this beforehand, but for some reason didn’t.) And it’s not really clear if SBF has internalized the lessons from Thursday, since he was still interrupting his lawyer and not answering direct questions the next day.
This trial has at least a week to go. Cohen said that he still needs a few more hours or so to finish his questioning, and then the prosecution will likely cross-examine Bankman-Fried until Wednesday. The government is also planning to put on a “brief” rebuttal case for a couple hours. Both sides then expect as long as three hours of closing statements each. A verdict could come as early as Friday, but most likely the trial will overflow into the next week.