Lawyers representing Sam Bankman-Fried push the judge’s patience to the limit.

Prosecutors may require up to six weeks to present their case against Sam Bankman-Fried, but it only took three days for the judge presiding over the trial to become frustrated with the defense team representing the former crypto chief.

Judge Lewis Kaplan expressed visible and audible dissatisfaction with Mark Cohen & Co. during Thursday’s proceedings. He reprimanded the defense attorneys on multiple occasions for asking imprecise and repetitive questions to government witnesses. The frustration reached a boiling point during a particularly exasperating cross-examination, leading the judge to call the attorneys for a stern sidebar discussion.

Addressing defense attorney Chris Everdell as he questioned Adam Yedidia, a former friend and employee of Sam who now serves as a prosecution witness, Judge Kaplan emphasized that the repetitive questioning needed to be curtailed, despite having allowed the defense team considerable leeway previously.

The judge’s clear discontent with the defense team highlights the challenges they face in two aspects of their strategy to secure a “not guilty” verdict from the jury. First, they must erode the credibility of government witnesses through skillful cross-examination. Second, they must introduce favorable facts about Sam Bankman-Fried into the court record by posing questions that do not encounter frequent objections.

The courtroom was rife with discomfort as the defense attempted to question Yedidia, the government’s first significant witness, in order to elicit insider knowledge about the downfall of the crypto exchange FTX.

Yedidia’s testimony revolved around a bug in FTX’s accounting software, which erroneously inflated the amount owed by Alameda Research to exchange customers to $16 billion instead of the actual debt, which was half of that sum. Even the misplacement of $8 billion in customers’ accounts posed a substantial issue. Prosecutors contend that Alameda’s role as FTX’s banking gateway during its early days, with customers directing their funds to the trading firm before being credited in their FTX accounts, played a part in the subsequent loss of $8 billion in customer funds.

In contrast, the defense presented an alternative perspective during their opening arguments, characterizing Alameda’s relationship with FTX as transparent and arguing that the loss of customer funds was not criminal but rather an egregious error in risk management. They seek to convey this narrative to the jury.

Sam’s legal team appears to be incorporating this approach into their cross-examination, deliberately posing questions to witnesses in the hope of eliciting desired responses. However, prosecutors possess a range of procedural tools to prevent such questions from being admitted into the record and prohibit witnesses from answering them. Assistant U.S. Attorney Danielle Sassoon firmly objected to the aforementioned questions, and Judge Kaplan consistently sustained these objections. A majority of the 84 objections raised on Thursday were ruled in favor of the prosecution.

At times, the judge preemptively sustained objections from the prosecutors before they were even voiced, displaying clear exasperation. During certain moments, he even took a minute to gaze at the ceiling or chastise the defense attorneys for what he deemed as foolish queries.

For instance, when defense attorney Everdell asked Yedidia if he recalled seeing a Toyota Corolla in an attempt to emphasize that Sam Bankman-Fried did not indulge in extravagant purchases, prosecutor Sasson immediately objected. Judge Kaplan responded with a humorous remark, stating that he didn’t believe there was anyone in the room who hadn’t seen a Toyota Corolla, urging proceedings to continue and eliciting laughter from the gallery.

Interestingly, Judge Kaplan himself drives a BMW X7 as witnessed by the author when he departed into late afternoon traffic on Thursday, wearing sunglasses and what appeared to be French cuffs.

The defense offered a different take. The defense presented a contrasting viewpoint during their opening statements, portraying Alameda’s banking relationship with FTX as transparent and emphasizing that the loss of customer funds was not a criminal act, albeit extremely foolish from a risk management perspective. Their intention is to convey this perspective to the jury.

Sam’s legal team seems to be incorporating this approach into their cross-examination, posing questions to witnesses with the hope of receiving affirmative responses. For example, during the questioning of Yedidia, they asked about who could use FTX as an exchange (objection), the level of work ethic (objection), and whether the witness believed FTX was well-managed (objection – well, you know how it goes).

However, prosecutors possess various procedural methods to prevent such questions from being included in the official record and restrict witnesses from answering them. Assistant U.S. Attorney Danielle Sassoon objected to the aforementioned questions, and Judge Kaplan sustained these objections. The majority of the 84 objections raised on Thursday were ruled in favor of the prosecution.

Judge Kaplan occasionally sustained objections from the prosecutors before they were even made, displaying his exasperation. He spent a moment staring at the ceiling and, on another occasion, scolded the defense attorneys for their perceived incompetence.

During the trial, defense attorney Everdell asked Yedidia if he remembered seeing a Toyota Corolla, as an attempt to highlight that Sam did not squander his wealth (or perhaps the customers’ wealth) on luxury items. Prosecutor Sasson objected to the question, to which Judge Kaplan responded with a humorous remark, stating that he believed everyone in the room had seen a Toyota Corolla and requested that proceedings move forward, resulting in laughter from the gallery.

Interestingly, Judge Kaplan drives a BMW X7, as observed by the author when he departed into late afternoon traffic on Thursday, wearing sunglasses and what appeared to be French cuffs.

What we’re expecting

Gary Wang, co-founder and former chief technology officer of FTX, has already provided approximately 40 minutes of testimony on Thursday. It is anticipated that he will continue discussing his role in overseeing FTX, particularly concerning the backdoor that allowed Alameda to access FTX customer funds.

Although the judge is evidently displeased with the defense’s approach, the crucial question remains: how will the jury perceive it? Despite the judge sustaining objections to various defense questions, the mere suggestion of credibility issues with the witnesses may leave a lasting impact.

Likewise, the statement made by Yedidia, a former FTX developer, claiming that he lost faith in the company due to FTX defrauding its customers, is likely to have an emotional impact that could be challenging to overcome, even if the defense and judge immediately requested to strike the remark from the record.

We are witnessing the continuation of the DOJ’s strategy, which appears to be highly focused on evoking emotions. Matt Huang, a venture capitalist, testified that his firm devalued $278 million of investments in FTX to zero, although he may not be viewed as a sympathetic figure due to his wealth.

Furthermore, Wang’s testimony began with a bold declaration that he committed crimes alongside Bankman-Fried and the rest of the FTX inner circle.

In terms of logistics, Wang’s testimony is expected to conclude on Friday. Prosecutors anticipate wrapping up their case by midday, leaving the possibility of hearing from the next witness, BlockFi’s Zac Prince, later in the day. If not, Zac Prince and Elan Dekel, a vice president at Pinecone, are set to testify next week.