Sam Bankman-Fried’s Terrible, Horrible, No Good, Very Bad Day

Sam Bankman-Fried began his testimony like the brilliant former golden boy from crypto’s better days. He ended the longest, strangest, most torturous day yet of his criminal trial more imperiled than ever before.

“Part of the problem is that the witness has what I’ll simply call an interesting way of responding to questions,” Judge Lewis Kaplan said before a gallery of exhausted faces late Thursday. They and he were the only audience around for a special hearing that turned what was supposed to be Sam’s first day of testimony into a freewheeling “deposition,” as defense counsel Mark Cohen put it.

The only solace for Sam may be that the jury wasn’t there to hear it. Kaplan had sent them home after lunch. He wanted to hold a “for my ears alone” hearing to determine if some defense arguments were admissible – a practice he’d seldom done in his 29 years on the federal bench.

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This newsletter isn’t so concerned with the contours of their arguments. Still – because Sam is so concerned with giving EVERY DETAIL some airtime – we’ll touch on them briefly for context. The defense wants to ask Sam about the lawyers he leaned on while running FTX and Alameda (into the ground). The government does not want to let them do this.

To be clear, this is only a portion of the defense argument. When Bankman-Fried shows up Friday to testify in front of the jury, he’ll have broader issues to discuss. But even if we put aside the specifics, the main issue may still be that he’ll be the one testifying, and he’ll still be subject to a cross-examination.

Shortly after you read this newsletter (assuming you read it at 6 a.m., which, like, you should) Judge Kaplan will decide whether to let both sides’ arguments play out again before the jury. Assuming he says yes, we’ll hear it all again and cover it then. Assuming he says no, well, you’ll get the greatest hits here.

Here’s the gist: Sam Bankman-Fried soared high with a strong command of the narrative and its characters when his lawyers walked him through what was almost certainly a well-rehearsed back-and-forth. He reminded…