Legal mastermind or hapless dude? A glance into Sam Bankman-Fried’s trial to this point

FTX founder Sam Bankman-Fried leaves the courthouse following his arraignment in New York Town on Dec. 22, 2022. Bankman-Fried’s trial simply concluded its 2d week, with explosive testimony from former lady friend Caroline Ellison.

Ed Jones/AFP by means of Getty Photographs

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Ed Jones/AFP by means of Getty Photographs

The U.S. govt says disgraced cryptocurrency rich person Sam Bankman-Fried dedicated some of the greatest monetary frauds in historical past. His protection legal professionals, on the other hand, argue he used to be only a younger man who were given in over his head. Two weeks into the high-profile prison trial of the previous CEO of cryptocurrency change FTX, jurors have already heard opening arguments in addition to testimony from the prosecution’s celebrity witness, Caroline Ellison, a former most sensible government in Bankman-Fried’s crypto empire and his ex-girlfriend. Listed below are 5 giant takeaways from the trial to this point. Portray Bankman-Fried as a prison mastermind Prosecutors have charged Bankman-Fried with seven prison counts, together with defrauding FTX shoppers and traders.

They argue he funneled FTX buyer cash right into a separate funding company he managed — Alameda Analysis — and used billions of bucks to pay down money owed, spend money on dangerous startup corporations and finance a luxurious way of life. If convicted of all fees, Bankman-Fried may just spend the remainder of his lifestyles in jail. Central to the federal government’s argument is that Bankman-Fried managed all of it, and the federal government has secured the cooperation of key contributors of his inside circle at FTX and Alameda Analysis. The jury has already began to listen to from them.

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Gary Wang, who co-founded each FTX and Alameda Analysis, stated Bankman-Fried directed him to modify a couple of strains of laptop code in order that finances from FTX shoppers might be urged to Alameda with out their wisdom. Wang, like different witnesses for the prosecution, stated everybody adopted Bankman-Fried’s directions. Prosecutors additionally presented documentary proof, together with Slack messages and several other audio clips of an all-hands assembly right through Alameda Analysis’s ultimate days, which they are saying reinforce their declare that Bankman-Fried used to be the only working the display at each corporations. A celeb witness delivers explosive testimony Some of the prosecution’s witnesses, one towers above the remaining in her significance to the case: Caroline Ellison, Bankman-Fried’s on-again, off-again lady friend and previous head of Alameda Analysis.

All through 3 days of testimony that were given tearful every now and then, Ellison — like Wang — stated it used to be Bankman-Fried who referred to as the pictures. “He directed me to dedicate those crimes,” she advised the court docket. Ellison stated he requested her to attract on FTX buyer finances to pay down Alameda Analysis’s money owed, and he advised her to govern monetary paperwork in “cheating” tactics to lie to traders and the company’s lenders. Ellison additionally alleged Bankman-Fried used to be manipulative. In excerpts from her diary, which the federal government entered into proof, Ellison wrote about her non-public {and professional} frustrations in coping with the previous FTX CEO. At one level, Bankman-Fried criticized her for failing to observe his funding recommendation, and in a memo he circulated, Bankman-Fried instructed Ellison used to be a vulnerable chief.

Caroline Ellison, the previous CEO of Alameda Analysis, leaves federal court docket in New York Town after attesting right through the trial of Bankman-Fried on Oct. 10. Ellison is a celeb witness for prosecutors as a result of she used to be each Bankman-Fried’s then-girlfriend and a most sensible government in his cryptocurrency empire.

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Michael M. Santiago/Getty Photographs

Ellison additionally detailed how a lot effort Bankman-Fried put into cultivating a undeniable character, in quest of to capitalize on what turned into his signature glance — unkempt hair, together with a T-shirt and shorts. That calculated nonchalance prolonged past the best way he dressed, she added. In step with Ellison, when FTX moved its headquarters to the Bahamas, they each to start with had luxurious vehicles to power. However Bankman-Fried did not just like the optics, and he quickly switched vehicles. “He stated he idea it used to be higher for his symbol to be using a Toyota Corolla,” she stated. Ellison herself began using a Honda Civic. However the protection argues Bankman-Fried used to be crushed From the outset, Bankman-Fried’s lawyers have attempted to signify their consumer is an entrepreneurial brainiac who could not stay alongside of how temporarily his crypto companies had been rising. On a lot of events, they’ve famous how briskly FTX, which Bankman-Fried began in 2019, grew right into a multibillion-dollar corporate that courted famous person traders and promoters like celebrity quarterback Tom Brady. In addition they have alleged it used to be tricky for each corporations to rent good enough workforce — particularly accountants.

Bankman-Fried’s prison group has emphasised how a lot agree with the defendant installed deputies like Ellison, particularly as he turned into extra excessive profile and traveled the sector assembly with lawmakers, regulators and rich traders. They have got stated their consumer used to be continuously being pulled in numerous instructions, they usually were given Ellison to confess that, for a number of months, she and her workforce had no touch with Bankman-Fried by any means. Bankman-Fried’s legal professionals have issues of their very own Significantly, Bankman-Fried’s legal professionals stay getting admonished by means of Pass judgement on Lewis Kaplan, who’s overseeing the trial. The pass judgement on gave the impression unsympathetic to nearly each movement that Bankman-Fried’s protection group filed. A number of weeks sooner than the trial, Kaplan revoked Bankman-Fried’s bail and despatched the defendant to a federal prison in Brooklyn to wait for trial.

FTX co-founder and previous leader era officer Gary Wang leaves the federal court docket in New York Town wherein Bankman-Fried is being attempted, on Oct. 10. Wang testified that Bankman-Fried directed him to modify a couple of strains of laptop code in order that finances from FTX shoppers might be urged to Alameda Analysis.

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Michael M. Santiago/Getty Photographs

To this point, the pass judgement on has overruled lots of the objections from Bankman-Fried’s legal professionals, and he additionally has transform noticeably impatient with their eagerness to retread floor lined right through direct examinations. No longer simplest that, however Kaplan has additionally criticized the legal professionals for many times inquiring for “sidebars” — conferences with him and the prosecution within the court, out of earshot of the jury. A query looms because the trial continues Will Bankman-Fried testify? That is the giant query. Prior to the trial began, Kaplan addressed Bankman-Fried immediately to tell him that he has the correct to take the stand in his personal protection, although his legal professionals advise him now not to try this. That will be dangerous, consistent with attorney Joshua Naftalis, who was a federal prosecutor. “Within the moderate white-collar case, maximum defendants do not testify,” he says. However Naftalis provides that it’s going to make sense for Bankman-Fried, if he is ready to persuade jurors that he really had no intent to dedicate any crimes. Bankman-Fried has prior to now proven himself to be vulnerable to speak. After he used to be positioned underneath area arrest at his oldsters’ house in Northern California, Bankman-Fried fastened a protection within the court docket of public opinion.

He began an e-mail publication on Substack; posted on X, previously referred to as Twitter; and sat for numerous interviews with journalists. When prosecutors requested for the pass judgement on to throw out his bail settlement, they famous that Bankman-Fried had greater than 1,000 telephone calls with reporters.