Home Finance Sam Bankman-Fried’s Trial Nears End as Closing Arguments Are Made

Sam Bankman-Fried’s Trial Nears End as Closing Arguments Are Made

Sam Bankman-Fried’s Trial Nears End as Closing Arguments Are Made


Sam Bankman Fried, the onetime cryptocurrency mogul, constructed his FTX crypto change right into a “pyramid of deceit” resting on a “basis of lies and false guarantees,” a federal prosecutor stated on Wednesday on the legal fraud trial.

Mr. Bankman-Fried’s lawyer countered that his 31-year-old consumer was merely a “math nerd” who could have made some dangerous enterprise selections, however had dedicated no crimes and by no means advised anybody to interrupt the legislation.

These divergent messages fashioned the core of the closing arguments in Mr. Bankman-Fried’s trial on Wednesday in a Manhattan courtroom. Nicolas Roos, the prosecutor, started by saying that Mr. Bankman-Fried was a liar who was chargeable for FTX’s collapse final yr, which had left clients unable to get well their deposits.

Mr. Bankman-Fried, who had testified in the course of the trial in his personal protection, had “lied about huge issues and small issues,” Mr. Roos stated, declaring that the defendant stated he “couldn’t recall” greater than 140 instances in response to questions on cross-examination.

Then Mark Cohen, a lawyer for Mr. Bankman-Fried, stated in his closing argument that the FTX founder had acted in good religion. “Again and again, the prosecution has sought to show Sam into some kind of villain, some kind of monster,” he stated.

Their dueling last arguments got here after 15 days of testimony in Mr. Bankman-Fried’s trial, which is likely one of the most high-profile monetary crime instances in years and has moved much more speedily than anticipated. The end result of the case might be seen as a referendum not solely on the fast rise and fall of Mr. Bankman-Fried’s enterprise empire, which at its peak was valued at $32 billion, but additionally on the unstable crypto business, which solely two years in the past was driving excessive earlier than melting down final yr.

The spectacular implosion of FTX final November set off a sequence response that led to the collapse of different crypto corporations. Mr. Bankman-Fried’s arrest and subsequent costs additionally set off regulatory crackdowns throughout the crypto universe.

On the coronary heart of Mr. Bankman-Fried’s case is whether or not he dedicated fraud and handled FTX as his private piggy financial institution. Prosecutors contend that he stole as a lot as $10 billion from FTX’s clients to pay for investments in different crypto corporations, purchase lavish real-estate within the Bahamas, the place the change was headquartered, and prop up a crypto buying and selling agency he additionally based, Alameda Analysis.

Mr. Bankman-Fried has pleaded not responsible to seven counts of fraud, conspiracy and cash laundering. If convicted, he may face what quantities to a life sentence.

Carl Tobias, a professor on the College of Richmond College of Legislation, stated the prosecution introduced a powerful case and made a smart move in “framing this matter as a garden-variety fraud case, fairly than a extra complicated cryptocurrency case.”

Mr. Bankman-Fried’s trial, which started on Oct. 4, has featured loads of damaging testimony. Prosecutors referred to as 16 witnesses, together with three of Mr. Bankman-Fried’s former high lieutenants, every of whom had pleaded responsible to fraud and conspiracy costs and agreed to testify in opposition to their former boss. The protection, for its half, referred to as simply three witnesses, one in every of whom was Mr. Bankman-Fried.

On the trial, the prosecution’s three star witnesses — Caroline Ellison, Nishad Singh and Gary Wang, who all labored with Mr. Bankman-Fried — testified that the FTX founder knew for a lot of months that his spending spree was unsustainable and improperly fueled by FTX’s buyer cash that had been transferred to Alameda. Additionally they stated Mr. Bankman-Fried knew Alameda couldn’t pay again the billions that it had misappropriated from FTX, with Alameda’s debt to FTX hid from clients and buyers.

In response, Mr. Bankman-Fried and his attorneys argued that he was unaware till just some weeks earlier than FTX collapsed that billions in buyer cash had been misused. Mr. Bankman-Fried testified that he had thought Alameda’s spending got here from company cash, not buyer cash. Any errors that had been made, Mr. Bankman-Fried stated, had been made in good religion and never meant to defraud anybody.

FTX was imagined to “transfer the ecosystem ahead,” he testified at one level. “It turned out the other of that.”

For closing arguments on Wednesday, Damian Williams, the highest federal prosecutor in New York, sat within the entrance row of the courtroom, accompanied by different authorities officers. Mr. Bankman-Fried’s dad and mom, who’ve been fixtures within the gallery all through the trial, skipped the federal government’s presentation however returned to the courtroom to see Mr. Cohen defend their son. Mr. Bankman-Fried sat between his attorneys, carrying the identical grey go well with and purple tie he wore on the stand in current days.

Standing on the lectern, Mr. Roos went over the highlights of the testimony from the prosecution witnesses, together with their statements that Alameda had particular privileges with FTX, similar to a $65 billion line of credit score that permitted the buying and selling agency to borrow billions from FTX’s clients. Mr. Bankman-Fried saved these particular privileges secret, Mr. Roos stated, “as a result of he knew they had been incorrect.”

The prosecutor additionally went over the inconsistencies in Mr. Bankman-Fried’s testimony with these of his former workers. He displayed charts with headings like “The defendant’s lies to the general public” and “The defendant’s false tweets in November.” He introduced digital information that confirmed Mr. Bankman-Fried had checked out incriminating paperwork that he stated he couldn’t recall having seen.

Mr. Roos additionally identified cases the place Mr. Bankman-Fried appeared to intentionally use FTX’s buyer deposits, together with to purchase again FTX fairness from Binance, a competing crypto change.

Mr. Cohen started his closing argument by saying prosecutors went out of their option to deal with Mr. Bankman-Fried’s look. “We’ll agree there was a time when Sam was in all probability the worst dressed C.E.O. and had the worst haircut,” Mr. Cohen stated, including that these weren’t crimes.

The prosecution’s retelling of FTX’s collapse was exaggerated and cinematic, Mr. Cohen stated. “In the actual world, in contrast to the film world, issues can get messy,” he stated, including that the large spending by FTX and Alameda “had been affordable company bills” and never a misuse of buyer cash.

Mr. Bankman-Fried acted in good religion along with his enterprise selections and lacked the legal intent to defraud anybody, Mr. Cohen stated. It was the prosecution’s burden to show guilt past an inexpensive doubt, he added, and Mr. Bankman-Fried was not obligated to show something.

Mr. Bankman-Fried testified “as a result of he wished to let you know what occurred,” Mr. Cohen stated. “It’s arduous to think about a extra tense state of affairs than that. He was removed from polished. He was himself, he was Sam. He advised you when he didn’t keep in mind issues.”

Mr. Cohen additionally tried to discredit Ms. Ellison, Mr. Wang and Mr. Singh. He displayed a chart displaying that every of them may face many years in jail, and argued that they had been performing out of self-preservation by cooperating with prosecutors.

As he completed his presentation, Mr. Cohen implored the jury to maintain an open thoughts. He emphasised how shortly Mr. Bankman-Fried’s life had modified — a school scholar someday, a crypto mogul the subsequent and now a defendant at a federal fraud trial.

As Mr. Cohen completed, Mr. Bankman-Fried seemed near tears. He blinked shortly, glancing forwards and backwards from the lectern to his dad and mom within the gallery. One in every of his attorneys put an arm round him, earlier than a pair of U.S. marshals led him out of the room.

On Thursday, the jury of 9 ladies and three males is predicted to start deliberating on a verdict after Choose Lewis A. Kaplan of U.S. District Courtroom instructs them on the related legislation.



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