YEREVAN (CoinChapter.com) — The much-anticipated Sam Bankman-Fried (SBF) trial kicked off on Oct. 3, 2023. The collapse of his $32 billion crypto empire, including his now-defunct exchange FTX and trading firm Alameda Research, has been dubbed one of the biggest financial frauds in US history.
This page tracks the latest updates (ordered by their date of occurrence) regarding the SBF trial.
Nov. 2, 2023: Breaking: Jury’s verdict is out. Sam Bankman Fried is FOUND GUILTY on all seven counts.
The deliberations by the 12 jurors took a little over 4 hours. During that time, they passed at least 5 notes to the judge, asking for various clarifications and details. These included a copy of Bankman-Fried’s indictment, while another asked for the judge’s help in locating the Government’s exhibits.
In what gave away the direction the jury was taking, a third note, that came during the dinner break, asked for the testimonies of the two investor witnesses who participated in the trial: former Third Point Management director Robert Boroujerdi and Matt Huang, the founder of Paradigm, a venture capital firm specializing in cryptocurrencies.
It all seems over for Bankman-Fried. While the verdict is in, he will have to wait till March 28, 2024, for his sentencing.
He still has other charges pending against him, for which he will go through another trial in March.
Nov. 2, 2023. Sam Bankman-Fried deliberately embezzled customer funds
It is the last hours that the jury will hear from the prosecution against Sam Bankman-Fried. After the closing arguments yesterday, during which defense counsel Mark Cohen tried to show SBF as a failed businessman with no ill intentions, prosecutor Daniel Sassoon was back with her counter-arguments.
She reminded the jury that Bankman-Fried lied to customers, and made them believe nothing was wrong at FTX, all the while using their funds to enjoy a lavish life.
She also argued that he had deliberately not hired a risk management officer so he could go ahead with his plan to steal money from the exchange.
“If you’re embezzling customer money … of course you’re not going to hire a chief risk officer. You can’t go into a jewelry store, steal a diamond necklace and then say there was no security guard. The defendant knew what he was doing was wrong, and that’s why he never hired a chief risk officer,”
Sassoon argued, according to Law 360 reporters following the trial from the court.
She also brushed off the defense’s claims that SBF’s former colleagues, who took the stand, had lied in their testimonies. She insisted that they were insiders and spoke the truth about the actions of the former crypto mogul.
After she finished, Judge Kaplan read out lengthy instructions to the jurors and sent them to the deliberating room.
They will remain behind closed doors until they reach a verdict.
Nov. 1, 2023. Sam Bankman-Fried’s trial nears end
It has been almost an entire month since Sam-Bankman-Fried’s trial began on Oct 3. And now, it is almost over.
After weeks of arguments, accusations, and testimonies from witnesses and experts, the trial has reached its final stage. Sam Bankman-Fried’s last-hour decision to testify and his subsequent grilling by US Assistant Attorney Daniel Sassoon, was perhaps the highlight of the trial.
The jury had already heard from some of SBF’s former colleagues, including his then-girlfriend Caroline Ellison, former director of engineering at FTX Nishad Singh, and FTX’s former tech chief Gary Wang. They have all pleaded guilty and are collaborating with the prosecution under a plea deal.
Bankman-Fried’s attempts to refute their testimonies didn’t go as planned. The Government tore into him, showing evidence after evidence that tied him to the billions of dollars in losses FTX customers suffered.
Prosecution and Defense offer closing arguments
Prosecutor Nicolas Roos kickstarted the closing arguments for the defense. Invoking the plight of the FTX customers, he told the jury that Sam Bankman-Fried was responsible for the losses they suffered.
In an aggressive attack on SBF, he contended that the former FTX chief’s business was nothing but a “pyramid of deceit” built on his lies.
According to Roos, the former crypto billionaire “spent his customers’ money, and he lied about it.”
The prosecutor also argued to the jury that Bankman-Fried willfully perjured himself by lying on the stand. He reminded them that he was under no obligation to testify. However, he chose to present himself as a witness to lie under oath to them.
Bankman-Fried lied to investors
Prosecutor Roos wanted to make sure the jury had not forgotten the facts. He reminded them that SBF had conspired with his colleagues to covertly integrate a $65 billion line of credit into FTX’s systems for the benefit of Alameda Research.
To jog their memory, he cited the testimony of FTX’s former tech chief Gary Wang to this effect.
Roos further argued that the fact that SBF knew Alameda had special privileges over other traders makes him “guilty of fraud”.
The prosecution also reminded the jury, who will decide SBF’s fate, that he took $1 billion out of the exchange with the pretext of buying back SBF shares from Binance and its CEO, Changpeng “CZ” Zhao.
However, he subsequently went on a spending spree. He blew out money to buy new expensive houses (including one for his parents) and a penthouse in the Bahamas.
He also spent millions on celebrities: all funds that allegedly came from the FTX customers.
The Government spent hours giving details about all the wrongdoings that happened with SBF’s consent. Before resting, the prosecution encouraged the jury not to believe the disgraced crypto mogul and to find him guilty of what he did.
The Defense begins its closing argument
After the prosecution had ended its argument, Sam Bankman-Fried’s lawyer tried to punch holes in the argument.
Defense counsel Mark Cohen did his best to save SBF from the strong attacks coming from the prosecution.
Emphasizing the fact that his client was nothing more than a failed businessman, Cohen insisted that he had no intention of frauding people. He argued that SBF ran a business in good faith, but it tanked because of bad decisions.
Instead of accepting this fact, he continued to argue, that the prosecution was trying to make a villain out of his client.
According to Cohen, the five government star witnesses – Ellison, Wang, Singh, former FTX lawyer Can Sun, and former coder Adam Yedidia amassed substantial wealth.
He pointed out that they had remained involved with SBF until the very end and only made a deal and testified against Bankman-Fried to save themselves. He questioned why the Government let them off the hook but targeted his client only.
He also defended Bankman-Fried’s decision to testify. He insisted SBF took the stand “because he wanted to tell you what happened.”
Cohen refuted all the important points the prosecution had raised, including the $65 billion line of credit to Alameda. He also brought up SBF’s deleted tweets about customer assets being fine. According to him, the fact that he deleted the Tweet the next day, after finding out the truth, shows he had no intention to lie.
Judge Kaplan kept the jury longer than usual to ensure the defense completed its argument. The jury will return on Nov. 2 to hear counter-arguments from the prosecution and other instructions from the judge.
Oct. 31, 2024. Sam Bankman-Fried wraps up his testimony
Sam Bankman-Fried’s testimony and subsequent cross-examination by the prosecution has ended. The former crypto billionaire took a huge risk by opting to take the stand.
His decision, which defies conventional practice, suggests that SBF had little choice left. As a means of last resort, he subjected himself to some tough questions from US Assistant Attorney Danielle Sassoon. He had perhaps hoped to come across to the jury as a genuine, failed businessman with no ill intentions.
Whether that strategy worked or not is yet to be seen. Here are some of the latest revelations from his testimony.
SBF gave special withdrawing privileges to users in the Bahamas:
During the trial, prosecutor Sassoon presented an email from Bankman-Fried addressed to Bahamian regulators. The said email was dated November 2022.
Around the time that SBF sent the email, FTX, his defuncted cryptocurrency exchange, was facing the imminent threat of collapse. Hence, it had suspended all customer withdrawals.
However, the email reveals that Bankman-Fried had proposed granting Bahamian customers a special privilege to proceed with their withdrawals.
When questioned about this, Bankman-Fried agreed that he opened the exchange for Bahamian customers, albeit “for a short period”.
Prosecutor Sassoon also revealed that SBF gave Bahamian Prime Minister Philip Davis courtside seats to a basketball game held at the FTX Arena in Miami.
Sassoon doesn’t cut SBF any slack
With her grilling suit on, prosecutor Sassoon successfully put Bankman-Fried in a tight spot.
On the first day of his testimony, he had attempted to shift blame on his former colleagues, including his former girlfriend Caroline Ellison.
Fried had said he was mostly unaware of the going about of Alameda Research, the crypto hedge fund that Ellison headed since 2021. Moreover, he had claimed he knew nothing about the code Gary Wang, FTX’s former tech chief, had created to grant Alameda an unfair trading advantage on the exchange.
His former colleagues have pled guilty and testified against SBF under a plea deal.
Sassoon pointed out that Bankman-Fried had been the CEO of Alameda before Ellison took over. He would have been aware of the dealings in the hedge fund. Moreover, being the majority stakeholder, he couldn’t have had an idea about what was going on.
To make her point, just before concluding her cross-examination, Sassoon played a recording of an Alameda staff meeting. The discussion in the recording allegedly took place in November 2022.
During this meeting, the jury could hear Ellison acknowledging that Bankman-Fried, collaborated with them in diverting customer funds.
However, the former FTX chief continued to maintain that he did not engage in any conspiracy with Ellison, Wang, or Singh.
With all the evidence and witnesses now presented, the lawyers from both sides will return on Nov. 1 to present their closing arguments.
Oct. 30, 2023: Sam Bankman-Fried’s testimony continues
After taking the stand in his defense last Friday, Bankman-Fried was back in the court to continue his testimony.
Pushing the blame on his former girlfriend, Caroline Ellison, SBF said that he was unaware that FTX was giving billions to Alameda. According to him, he found out about the $8 billion liability at Alameda in October 2022. This was just days before FTX collapsed on Nov. 11.
Bankman-Fried reiterated that he had asked Ellison to hedge the funds after the mid-2022 market crash. However, she failed to comply.
The former crypto billionaire also contended that he was always traveling on business trips. Because he trusted Ellison, he believed she was taking care of the business when in reality, her actions made the company go bankrupt.
Changpeng Zhao CZ from rival exchange Binance tanked FTX
During his testimony, Bankman-Fried meticulously recounted the fateful day when FTX grappled with massive customer withdrawals culminating in its bankruptcy.
In an attempt to deflect responsibility for the exchange’s downfall, Bankman-Fried’s legal team sought to attribute blame to competitor Binance.
On Nov. 6, 2022, FTX witnessed a staggering $1 billion in net withdrawals. This, according to the defense, was triggered by a tweet from Changpeng Zhao, the CEO of Binance. Subsequently, the rate of withdrawals continued to surge.
The very next day, FTX encountered a staggering $4 billion in net withdrawals. This, per SBF, was a 100-fold increase compared to a typical day.
“One billion was already about 10 times as much as I’d seen on a given day. We were risking a solvency crisis,”
he acknowledged.
SBF also explained his now-infamous “Assets are fine” Tweet. He had originally posted it in good faith on Nov. 7. However, he realized that the company’s financial situation was, in fact, not as stable as initially believed. Hence, on the next day, he deleted the post.
Marc-Antoine Julliard, the first witness who took the stand for the prosecution, had cited the tweet. According to him, he lost around $133,000 on FTX after failing to withdraw amid the panic. He had trusted SBF’s post, which reassured him that his funds were safe.
By the time he wanted to cash out, it was already too late.
Prosecutor Daniel Sassoon grills Bankman-Fried
After wrapping up his testimony, the prosecutors got a chance to cross-examine him. US Assistant Attorney Danielle Sassoon dwelled on the alleged lies that SBF had constantly said since the collapse of FTX.
Since Bankman-Fried had tried to distance himself from Alameda, Sassoon laid out the facts before him. These included information that he owned a majority stake in both FTX and Alameda. Moreover, she pointed out that star witnesses Ellison, Singh, and Wang were all his employees.
Her motive was to show that they couldn’t have acted independently of SBF. Hence, even if any of them took actions that led to the collapse of FTX, it was only with his consent.
Prosecutor Sassoon also presented a litany of prior statements, including interviews and emails, which contradicted the evidence presented in court.
Bankam-Fried continued to maintain that he did not know that Alameda had special trading privileges on FTX. He also insisted that he didn’t know about the $65 billion line of credit offered to it.
The trial is set to continue with more cross-examination of Bankman-Fried before closing arguments later in the week.
Bankman-Fried’s future depends on how convincing his testimony will be. If he fails to hold up, the jury could send him away for years.
Oct. 28, 2023: Sam Bankman-Fried testifies before the jury. Some highlights from his anticipated testimony
In the court proceedings on Oct.26, Bankman-Fried had provided initial testimony outside the presence of the jury. This was done by presiding Judge Lewis A. Kaplan’s demand for him to determine the admissibility of his claims regarding the involvement of lawyers in FTX.
On Friday morning, before SBF took the stand, Judge Kaplan ruled that he could testify about the role of company attorneys in crafting FTX’s data retention policies. However, the judge also imposed restrictions on what he could say. He prevented him from stating that attorneys had drafted other legal documents related to the alleged siphoning of customer deposits from FTX to Bankman-Fried’s hedge fund, Alameda Research.
Furthermore, in a blow to the defense, the judge rejected SBF’s request to prevent his answers provided during government questioning the previous day from being used as impeachment evidence during cross-examination.
He had barely held up against the prosecution’s cross, causing his lawyers to fear the jury would feel guilty.
However, the judge asked them to satisfy themselves with the objections he had ruled in favor of the previous day.
Bankman-Fried pleads not guilty
With the jury called in, Bankman-Fried took the stand to testify in his defense. He straight out denied all charges against him. Although he admitted to administrative oversight, he insisted that he did not defraud anyone.
According to him, his biggest failure, among others, was not having a proper risk management committee in the company.
After narrating how he and his friends founded Alameda and FTX, he tried to distance himself from the technical aspects of the company.
In what came across as a tit-for-tat action, he shifted a lot of blame on his former friend and colleague Gary Wang. Per his testimony, FTX’s former tech chief was responsible for writing the code for the exchange and had total, independent control over all aspects related to it.
For the uninitiated, Wang has already pleaded guilty to several charges. He is collaborating with the prosecution and testifying against SBF as a star witness.
As part of his main defense, Bankman-Fried told the jury that he was made to believe that Alameda had legal authority to borrow funds from FTX through its spot-margin lending program.
He further insisted that he had valid and sincere reasons for instructing his colleagues to grant Alameda special privileges on FTX.
SBF also tried to counter Nishad Singh’s testimony, which accused him of extravagant spending. Instead, he insisted that he considered the money he spent as an investment that would benefit the company.
Caroline Ellison bankrupted Alameda: SBF
In a sweeping move against his former girlfriend, Bankman-Fried rebutted Caroline Ellison’s claims that he directed her to send a doctored balance sheet to Alameda’s lenders in June 2022. Instead, the former FTX chief claimed the idea came from Ellison, and not from him.
He further blamed Ellison for the massive losses Alameda suffered during the crypto market crash in May 2022. He claims to have encouraged her to hedge trading positions, but she ignored his instructions.
In what came as perhaps the most shocking part, he denied having had knowledge of Alameda owing $8 billion to FTX until June 2022.
Oct. 26, 2023: Sam Bankman-Fried testifies without a jury
Following the testimonies and cross-examinations of Krystal Rolle and Joe Pimbley, Bankman-Fried took the stand to testify.
However, before he could do that, Judge Kaplan said he wanted to hear the testimony first to decide which portions, if any, could be included in the trial.
For him to vet what SBF had to say, the judge dismissed the jury for the rest of the day. They will return to listen to his testimony on Friday, Oct. 27.
Because the judge allowed observers and journalists to be present, he ordered the jurors not to follow the news or do research while away from court.
Defense counsel Mark Cohen began throwing questions at SBF about loans that Alameda and FTX provided to individuals within the companies. These also included a loan of $210 million that Bankman-Fried wrote to himself.
SBF throws his legal team under the bus
From what became evident from the beginning of his testimony, SBF is planning to blame the alleged illegal loans on his legal team. He contended that he took those steps after seeking legal advice from them, keeping the interest of FTX and its customers in mind.
By dragging in this argument, his defense is trying to argue that SBF had clear intentions and no ulterior motives, as alleged by the prosecution.
One of the former FTX lawyers, Can Sun, has already testified against Bankman-Fried. In his Oct. 19 testimony, Sun had told the court that his former boss was aware of the illegality of his actions but did them anyway.
Meanwhile, US Assistant Attorney Danielle Sassoon grilled SBF on two very important points. At first, she dwelled on the topic of the deleted chats and messages between SBF and other FTX and Alameda employees.
She was trying to make a case that Bankman-Fried deleted them to hide alleged criminal details of what he did and asked others to do. Her questions are hard-hitting, and SBF looked like he was finding them tough to handle.
Prosecutor Sassoon also interrogated Bankman-Fried regarding the 2020 decision to establish a bank account in the name of an Alameda Research subsidiary, North Dimension. According to her, he subsequently channeled FTX customer funds into that account.
Prosecutors have contended that this arrangement was part of an extensive fraudulent scheme designed to allow Bankman-Fried discretionary use of the funds via the North Dimension account.
After listening to the entire detailed testimony, the judge wrapped up the trial for the day. Tomorrow morning (Oct. 27), he will rule on what details can be admissible in front of the jury.
Oct. 26, 2023: Sam Bankman-Fried’s Trial Resumes: Here is The Latest From The Day
The trial of Sam Bankman-Fried, the disgraced crypto mogul and founder of defunct crypto exchange FTX, resumed in lower Manhattan today.
The last trial session took place on Oct. 19, where Former FTX General Counsel Can Sun and Bob Boroujerdi, a former Third Point managing director, testified against SBF. Presiding judge Lewis A. Kaplan adjourned the court for an entire week afterward.
But before the trial kicked off, the judge dismissed one of the jurors who was feeling sick. While the juror requested a day’s rest to recover, the judge didn’t oblige and removed him from the case. Judge Kaplan feared he may infect the other jurors as well.
The highlight of today’s trial will be Bankman-Fried’s testimony. In a letter to the judge, the defense had already informed about their intention to call him to the stance today. He is expected to take the stand after lunch.
However, until his testimony, the prosecution had called FBI agent Marc Troiano. He was responsible for examining devices on behalf of the prosecution.
During his testimony, Troiano informed the jury that, based on his analysis, Bankman-Fried was a member of 325 Signal messaging groups. Out of these, 288 were configured to delete messages automatically.
According to the trial testimony, Bankman-Fried favored auto-deletion because he had concerns about regulators accessing his thoughts at a later time.
The prosecution rested its case following Troyano’s testimony.
Judge Kaplan refuses SBF’s acquittal request
After the prosecutors had rested their case, SBF’s legal team made an effort to trigger a Rule 29 motion. In an argument to Judge Kaplan, they contended that the government’s presentation lacked sufficient grounds for pursuing wire fraud and money laundering charges.
Note: Rule 29 allows the defendant’s attorney to request a judgment of acquittal by asserting that the evidence presented does not justify a conviction on the specified charges.
As expected, the prosecution opposed it. The judge agreed, thus denying the defense’s Rule 29 motion.
Bankman-Fried’s lawyers will now call their witnesses. While one of them is SBF himself, the other two to take the stand will be Krystal Rolle, a lawyer from the Bahamas, and Joseph (Joe) Pimbley, a database expert from the consulting firm PF2.
Oct. 19, 2023: Former FTX lawyer offers damaging testimony against Bankman-Fried on the missing FTX billions
Former FTX General Counsel Can Sun took the stand today to testify under a non-prosecution agreement. In what came as a damaging testimony against SBF, Sun spilled out some disturbing facts from the days ahead of the FTX crash.
As FTX began collapsing in November 2022, Sun sought investment from private equity firm Apollo Global to manage increased customer withdrawals. Apollo requested a balance sheet, and Sun received one from Sam Bankman-Fried or Ramnik Arora, the former head of product at FTX.
Sun was shocked to discover FTX was “$7 billion short” of meeting customer withdrawals. However, he proceeded to send the balance sheet to Apollo.
Apollo, of course, turned down the investment and inquired about the missing funds. It further requested “legal justifications” for the hole in the balance sheet.
Faced with the situation, Bankman-Fried asked Sun to come up with a legal excuse for the missing funds.
“He asked me to come up with legal justifications. It basically confirmed my suspicion that had been rising all day that FTX did not have the funds to satisfy customer withdrawals, and that they had been misappropriated by Alameda,”
Sun testified.
The former FTX council also claimed SBF had wanted to cite the “borrow-lending facility” (margin trading) from FTX’s terms of service to explain the situation. However, he told the disgraced crypto mogul that this argument wouldn’t stick.
Although he resigned shortly after, he saw the defendant in December 2022 on Good Morning America. During the interview with the host, George Stephanopolous, he still brought up the borrow-lending facility despite knowing that the argument wouldn’t stick.
The testimony will do a lot of damage to the defense’s case.
Bob Boroujerdi, a former Third Point managing director, also took the stand. Following his testimony, the judge wrapped up the week. Sam Bankman-Fried’s trial will resume next week on Thursday, Oct. 26.
Oct. 18, 2023: Judge Kaplan gets angry at lawyers for calling an expert who isn’t an expert!
During the 11th day of Sam Bankman-Fried trial, the court got to see the first real dose of preceding Judge Lewis A. Kaplan’s anger.
Google’s policy specialist, Cory Gaddis, was on the stand to testify about metadata in a Google Sheets document linked to SBF’s Google account.
However, during the cross-examination, Gaddis admitted that he wasn’t an expert in metadata.
This unexpected revelation infuriated the judge. He promptly scolded both the prosecution and the defense for what he considered a waste of the jury’s time.
Judge Kaplan expressed his frustration, referring to the trial’s importance and the resources involved, emphasizing that lawyers on both sides should have performed better.
The judge was particularly incensed by the fact that Gaddis had been flown from Texas to New York to testify on a subject in which he lacked expertise.
The judge demanded a higher standard of legal diligence in such a significant case, especially when 18 individuals, including the jury and alternates, had devoted their time and attention to it.
FTX had $9 billion in missing funds
Before the non-expert “expert” took the stand, the court had heard about the FTX’s missing funds.
Peter Easton, the subsequent witness, delivered a detailed account of the mingling of funds between FTX and Alameda Research dating back to 2021. He is an accounting professor at Notre Dame with expertise in forensic financial analysis.
Easton’s examination revealed a persistent shortfall in Alameda’s accounts on FTX from January 2021 to November 11, 2022, despite ongoing disbursements to fulfill financial commitments.
He disclosed that out of the $11.3 billion in FTX customer funds allocated to be held by Alameda Research, only $2.3 billion could be accounted for in its bank accounts. This would create a significant shortfall of $9 billion in coverage if every customer had opted to withdraw their funds.
Oct. 17, 2023: Sam Bankman-Fried continued to enjoy VIP meetings ahead of the FTX implosion
In an interesting development, Sam Bankman-Fried found himself taking a walk down memory lane to the months ahead of the collapse of his exchange, FTX.
The prosecution had called FBI Special Agent Richard Busick to provide testimony regarding instances when SBF’s phone signal was detected in Manhattan. His testimony, which included calendar entries, was introduced as part of an FBI analysis aimed at establishing jurisdiction. It specifically sought to clarify why the Manhattan-based US attorney’s office is prosecuting Bankman-Fried.
The revelation of his extensive calendar entries unveiled notable engagements in the months preceding FTX’s implosion. Sam Bankman-Fried attended the following:
– On October 14, 2022, a discussion hosted by Morgan Stanley involving investors prominently featuring Bankman-Fried.
– On September 21, 2022, a “small group dinner” at New York’s Pierre Hotel with Yasir Al-Rumayyan, head of Saudi Arabia’s sovereign wealth fund.
– On September 20, a meeting with former President Bill Clinton.
– On September 16, a meeting with New York Governor Kathy Hochul.
– A dinner with New York Mayor Eric Adams earlier in March 2022.
– A brief 15-minute window for Bankman-Fried’s Forbes magazine cover shoot in 2021.
The events above not only helped establish jurisdiction but also raised pertinent questions about Bankman-Fried’s awareness of the impending crisis.
Nishant Singh grilled
Earlier in the day, FTX’s former head of engineering, Nishad Singh, who had testified against SBF, faced rigorous cross-examination from defense lawyer Mark Cohen.
Singh had earlier attacked Bankman-Fried for choosing to spend money on a $35 million penthouse. Besides pointing out that Singh also shared the house, Cohen probed him on the intention of his testimony.
Given that its occupants were quite wealthy at the time, the defense attorney made the case that the price tag on the house was not unusual. Singh replied that he wasn’t privy to what is reasonable for billionaires.
Cohen also brought up Singh’s extravagant purchase of a $3.7 million house in Washington in an attempt to discredit his testimony that he was worried about misuse of customer funds. The former FTX engineering director had borrowed money from the exchange to pay for the house. In his defense, Singh said that he had later voluntarily forfeited the house to rectify his actions.
Singh’s damaging testimony also provided insights into the influence of Bankman-Fried’s parents in the business and on contributions. According to him, Stanford Law School professors Joe Bankman and Barbara Fried advised him on a $477 million loan structure. Moreover, Sam, his brother, Gabe, and their mother acted as political consultants when making contributions.
This was the first time SBF’s lawyers had come out aggressively in his defense. The other two star witnesses, Gary Wang and Caroline Ellison had faced questions after their damaging testimonies. But the defense did not grill any of them as rigorously as Singh.
Cohen wanted the jury to see his client was being made a scapegoat in what is nothing more than a genuine failure in a business venture.
Oct. 16, 2023: Sam Bankman-Fried’s trial enters week 3 with more damaging testimonies
After hearing testimonies from FTX insiders Gary Wang and Caroline Ellison, the prosecutors have brought their third star witness to the stand. Nishad Singh, the former FTX engineering director who pled guilty and is cooperating with prosecutors in the case, testifies against Sam Bankman-Fried.
After taking the stand, Singh provided a revealing perspective on the events leading to FTX’s collapse.
According to his testimony, he only became aware of the alleged fraud scheme a few months before FTX’s bankruptcy. However, he claimed to have harbored concerns about the extravagant spending of Bankman-Fried, from early on.
During his testimony, Singh presented spreadsheets illustrating his former boss’s lavish expenses. He showed how SBF shelled out $250 million to secure FTX’s name on the Miami Heat’s. Moreover, he spent extensively on celebrity endorsements, including figures like Steph Curry, Tom Brady, and Gisele Bündchen.
Bankman-Fried made investments to influence
A part of Singh’s testimony was dedicated to Bankman-Fried’s heavy investments in venture capital firm K5 Global. In what came as a shocking revelation, he testified that the FTX chief invested primarily due to its connections with high-profile individuals. That list included Hillary Clinton, Katy Perry, Leonardo DiCaprio, Jeff Bezos, and Kris Jenner.
According to Sigh, SBF wanted to gain influential connections. He even had plans for dinner gatherings with luminaries like Elon Musk, Barack Obama, Rihanna, and Mark Zuckerberg.
User funds spent on Democratic campaigns
Just like his colleagues who testified before him, Singh also said that Alameda secretly borrowed $13 billion from FTX. After finding this out, he felt betrayed and horrified and wanted to resign. But SBF persuaded him to stay, promising to reduce spending. However, Bankman-Fried allegedly continued extravagant endorsements and speculative ventures.
Additionally, FTX executive Ryan Salame allegedly used Singh’s bank accounts to funnel money to Democratic political candidates. This financial backing took various forms. Some donations were processed through wire transfers, while these involved Singh signing blank checks that were then provided to the defendant’s brother, Gabe Bankman-Fried, who headed his political action committee.
These revelations shed light on the intricate web of financial mismanagement and questionable practices within the FTX.
Singh will return to take the stand on Oct. 17 to continue his testimony.
Oct.13, 2023: Sam Bankman-Fried’s trial wraps week 2 with revelations from BlockFi
On the final day of the second week of Sam Bankman-Fried’s trial, Zac Prince, the founder and CEO of BlockFi Inc., took the stand to testify.
Doing ample damage to the defense’s case, he disclosed that his firm, which is also now bankrupt, had relied on Alameda’s botched-up balance sheet which claimed assets exceeding $6 billion.
BlockFi, which is currently undergoing Chapter 11 proceedings in New Jersey, used these balance sheets to extend $800 million in loans to Alameda from July to November 2022.
According to Prince, his firm would not have offered Alameda the loan had they known the truth.
At the time of FTX’s collapse, Alameda still owed BlockFi $650 million in loans. The crypto lender had an additional $350 million deposited on the exchange.
The defense tried to argue that BlockFi was headed to insolvency regardless. However, Prince maintained that his firm went bust primarily due to its $1 billion exposure to FTX and Alameda.
His testimony comes on the heels of former Alameda CEO Caroline Ellison. She had earlier testified that Sam Bankman-Fried had asked her to alter the fund’s balance sheets in 2022 to conceal the $10 billion Alameda had borrowed from FTX customers.
Oct. 12, 2023: From manipulating Bitcoin (BTC) price to conspiring with authorities against Binance: Caroline Ellison’s new bombshells
Sam Bankman-Fried’s girlfriend and former Alamdea chief Caroline Ellison returned to the witness box. The most important star witness of the prosecution shocked the court by making some damning reservations about the activities of FTX.
Here are some highlights from her testimony:
Courting the Saudi Prince:
One of the interesting revelations coming from Ellison during today’s trial included details about SBF’s attempts to attract high-profile investors. She claimed that in 2022, months before the exchange’s collapse, Bankman-Fried was actively pursuing Mohammed bin Salman Al Saud, the Crown Prince of Saudi Arabia. He wanted Prince Salman to invest in FTX. Around the same time that he was courting the Saudi Prince, Alameda continued to withdraw billions of dollars from the crypto exchange to cover loans and engage in high-stakes wagers.
Alameda Lied to Genesis:
Diving into details of the $10 billion in missing funds from FTX, Ellison revealed that Sam had directed her to hide the extensive loan from Genesis, its lender. According to her, over 1 million customers had deposited around $13 billion into FTX. However, Alameda had taken $10 billion from these funds and made bad investments, rendering the exchange unable to service withdrawals. To conceal this, Ellison shared falsified Google Docs with Matthew Ballensweig, the former managing director of Genesis, when the latter asked about the financial details of the loan.
Conspiring to keep Bitcoin under $20,000:
As per Ellison’s shocking testimony, Bankman-Fried made deliberate efforts to offload Bitcoin (BTC) to artificially depress its price, ensuring it stayed below $20,000. She asserted that SBF had instructed Alameda Research to continue selling BTC if its price crossed the $20,000 threshold. This was all part of a calculated strategy to prevent Bitcoin from surpassing that mark.
Sam worked with regulators against Binance:
Today’s testimony from Ellison brought back memories from the rivalry between FTX and Binance. Following the embarrassing shutdown of his cryptocurrency exchange, Sam Bankman-Fried blamed Binance CEO Changpeng Zhao (CZ) for the collapse of his business. Now, his girlfriend has punched holes in those allegations. According to her, he conspired with US regulators to crack down on Binance.
“Sam said that he thought that was one of the best potential ways for FTX to increase market share. Regulators had been promising him this would happen for a while,”
she said.
The testimony didn’t skip the attention of CZ, who shared the news on X with a remark.
5.Thai Prostitutes and bribes to Chinese officials:
In 2021, crypto exchanges OKX and Huobi froze Alameda’s crypto funds due to a suspected connection with money laundering. This prompted Bankman-Fried to strategize on recovering the frozen funds. Initially, according to Ellison, the firm attempted to resolve the issue with a lawyer, but that proved unsuccessful. In a more unconventional turn, SBF tried using the identities of Thai prostitutes to create accounts on the exchanges to regain access to the funds. However, when this tactic failed, Bankman-Fried, initially reluctant, eventually agreed to an employee-suggested bribe. Notably, a former Alameda trader named “Handi” expressed strong objections to the bribe, revealing that her father held a government position. This led to a heated confrontation in which SBF, raised his voice and told Handi to be quiet.
Once Ellison’s testimony concludes, the next witness expected to take the stand is Christian Drappi, a former FTX software engineer. Additionally, on the lineup is Zac Prince, the founder and CEO of the financially troubled crypto lender, BlockFi. The firm faced substantial financial losses due to its deep involvement with FTX and its subsequent collapse last year.
Oct. 11, 2023: Sam Bankman-Fried wanted to be US President: More from Caroline Ellison
Things are not looking good for Bankman-Fried as the trial continues with testimonies from star witnesses. In what may prove damaging details against Bankman-Fried’s not-guilty plea, Caroline Ellison alleged he was aware of the risks involved in using Alameda funds to make venture investments.
She told her former boyfriend that at the time, there was already a 30% chance that Alameda might be unable to meet loan recalls from the crypto company Genesis if a significant market downturn occurred.
However, he ignored her warnings and intended to proceed with substantial venture investments. This increased the said risk to 100%. Furthermore, he instructed Ellison to convert more of their loans into fixed-term agreements.
When asked by prosecutor Danielle Sassoon about the plan if Genesis recalled these loans, Ellison explained that they planned to borrow from FTX if no other assets were available.
She also detailed how Alameda provided loans to Bankman-Fried and other FTX insiders, which were used for early-stage investments in startups. These included a Bitcoin (BTC) mining firm and an artificial intelligence company.
Additionally, he used some of these funds for political contributions, including a $10 million donation to President Joe Biden’s campaign. Bankman-Fried allegedly rationalized these donations by stating they yielded significant influence for relatively small expenditures.
In a significant revelation, Ellison also told the court, while being cross-examined, that Bankman-Friend wanted to become US President. According to the testimony, He thought “there was a 5% chance” that he would make it to the Oval Office.
He could spend decades in jail if found guilty, far from political power or influence. Meanwhile, Ellison will return on Oct. 11 to continue her testimony against her former boss and boyfriend.
Oct. 10, 2023: Bankman-Fried’s former girlfriend, Caroline Ellison testifies
Caroline Ellison, Sam Bankman-Fried’s former girlfriend who headed Alameda Research, came to court to testify. She is perhaps the most important star witness of the prosecution in their case against SBF.
In a startling opening statement after taking the stand, she wasted no time admitting to serious financial crimes. These included fraud, conspiracy to commit fraud, and money laundering. These offenses were related to her defrauding FTX customers and lenders connected to FTX and Alameda Research.
As expected, Ellison threw SBF under the bus. She alleged that she had carried out these crimes at the direction of none other than his former boyfriend and boss.
According to her account of the events, Alameda Research had siphoned off several billion dollars to settle debts and make investments.
She claimed that FTX had borrowed an astonishing sum, hovering around $10 billion. However, the reality was even more staggering. Alameda had ultimately absorbed around $14 billion, albeit managing to repay a portion.
She also confessed to her role in the deception, which included sending manipulated balance sheets to lenders under Bakeman-Fried’s guidance, in which she understated liabilities to create an illusion of reduced risk.
This labyrinthine financial scheme, as described by Ellison, ultimately left FTX unable to fulfill customer withdrawals. Alameda had utilized these funds for investments and to settle debts.
Her testimony, she explained, was part of a cooperation agreement with the prosecution. She had previously pleaded guilty and agreed to testify against Fried.
As the trial continues, observes expect Ellison to give more details from the unfolded events. Meanwhile, Bankman-Fried’s lawyers will do their best to undermine her testimony and paint to the jury why they should not trust her version of events.
Oct. 10, 2023: Week 2 of Bankman-Fried’s trial begins: Gary Wang returns to the stand
In lower Manhattan, the second week of Sam Bankman-Fried’s trial kicked off today, Oct. 10.
The day started with former technology chief Zixiao “Gary” Wang returning to the witness stand. Following his damaging testimony last week, Wang shared more details about Bankman-Fried’s illegal handling of affairs at FTX.
In particular, he testified that he had overheard SBF give fake assurances to investors over the phone that Alameda Research did not have any special privileges on the exchange.
His statement evolved around his testimony last week when he claimed that SBF had asked him to create a code allowing Alameda to maintain unlimited credit on FTX. When a suspecting user on X (then Twitter) asked about this, Bankman-Fried lied that his hedge fund’s FTX trading account was “just like everyone else’s.”
However, SBF’s defense was not about to give him a free pass. Christian Everdell of Cohen & Gresser LLP questioned him to cast doubt on his narration of events.
Everdell delved into Gary Wang’s testimony, challenging his claim that he had overheard Sam Bankman-Fried assuring investors and journalists. Everdell sought specifics, asking Wang about the identities of these journalists and investors.
Wang, however, admitted he didn’t possess that information, as he could only hear Bankman-Fried’s side of the conversations. Everdell highlighted the uncertainty in the witness’s account, pointing out that without knowing the context of Bankman-Fried’s statements, it remained unclear what he was responding to when he mentioned that Alameda’s account was similar to everyone else’s.
Alameda Research’s former head, Caroline Ellison, will stand next to testify against SBF.
Oct. 6, 2023: The first week of Sam Bankman-Fried’s trial wraps up
The first week of Sam Bankman-Fried’s high-profile criminal trial has concluded with several key developments. FTX’s former tech chief, Gary Wang, took the stand and gave damning details on the activities of the defunct crypto exchange and its affiliated trading firm Alameda Research.
During his cross-examination, Wang reportedly alleged that SBF had instructed them to collaborate with authorities in the Bahamas but not with those in the United States. According to him, Bankman-Fried had hoped to keep the bankruptcy proceedings in the Carribean nation. This, per Wang, contradicted the advice given by Ryne Miller, the firm’s general counsel.
The former FTX executive also told the court that he had returned to the USA on Nov. 16, 2022, just five days after the firm filed for bankruptcy. Upon his return, he immediately contacted the authorities, pleaded guilty, and offered his support by providing case details.
He hopes to avoid jail time thanks to his damaging testimony against Bankman-Fried.
Wang also testified that Caroline Ellison, SBF’s former girlfriend and head of Alameda Research, had confided in him that the trading firm had borrowed $14 billion from FTX. Meanwhile, the prosecution maintains that Alameda’s actual line of credit with FTX was $65 billion.
Ellison is one of the star witnesses against Bankman-Fried and will testify when the trial resumes on Tuesday, Oct. 10. Wang is also set to take the witness stand next week to complete his testimony.
Oct. 5, 2023: DOJ wants to forfeit two multimillion-dollar jets of Sam Bankman-Fried
The US government is moving to seize two private jets connected to Sam Bankman-Fried, as detailed in a forfeiture bill filed by the Government. US Attorney Damian Williams, who is leading the federal prosecution against Bankman-Fried, stated in the filing that the aircraft is eligible for confiscation as part of the criminal indictments against him.
The planes in question are identified as a Bombardier Global 5000 and an Embraer Legacy EMB-135BJ. They reportedly cost $15.9 million and $12.5 million, respectively, as a bankruptcy court filing indicates.
In August 2023, FTX debtors asserted their ownership of the planes. However, the Bombardier Global has been held by the government since February.
Meanwhile, this ownership is currently under dispute. Bahamas-based charter flight operator Island Air Capital (IAC) claims to have originally bought both jets for $15.9 million and $12.5 million, respectively. IAC maintains that it utilized financing provided by FTX for these purchases.
Adam Yedidia, Bankman-Fried’s college friend, who testified yesterday, returned to the stand. The prosecutors had offered him immunity for his testimony against SBF.
While narrating insider details from his interactions with Bankman-Fried, he maintained that FTX had “defrauded all its customers.” Yedidia also confessed that he had earned $11 million from FTX in 1.5 years. However,
The jury also heard testimony from former FTX technology chief Zixiao “Gary” Wang. The former executive admitted that he and Bankman-Fried had deceived the public while inappropriately diverting FTX customer funds to Alameda.
He will return to complete his testimony tomorrow.
Oct. 4, 2023: Bankman-Fried’s college friend Adam Yedidia testifies against him
After a bustling day in court, Adam Yedidia, Bankman-Fried’s college friend (they studied at MIT together), took the witness stand. He discloses his role as a developer at FTX. According to his testimony, he also briefly worked as a trader at Alameda Research.
SBF’s old friend was everything but friendly on the stand. He told the court that he stopped communicating with the defendant in November 2022, because he suspected Bankman-Fried was using FTX customer funds to pay Alameda’s debts.
Upon questioning, it became evident that Yedidia was testifying under a court-issued immunity order. He sought immunity because his work as a coder may have helped SBF in the alleged crimes he committed.
The government alleges Bankman-Fried directed code creation to access FTX customer deposits covertly.
Before his testimony, trader Marc-Antoine Julliard had taken the stand. During his cross-examination, he informed the jury that he had lost approximately $100,000 due to the collapse of FTX.
At the start of the day, the prosecutor blamed SBF for “committing a massive fraud and taking billions of dollars from thousands of victims.“
The opening remarks, full of strong accusations against the FTX founder, came from Prosecutor Thane Rehn of the Southern District US attorney’s office.
Meanwhile, in his opening statement, defense counsel Mark Cohen assured the jury that his client “didn’t intend to defraud anyone“. He argued that SBF tried to run a business in “good faith” but failed.
NFL quarterback Tom Brady, who received millions from SBF to promote FTX, also came up in the trial.
Oct. 4, 2023: Jury formed: Opening arguments commence
After the vetting process of jurors, which stretched to the second day of Bankman-Fried’s trial, the lawyers on both sides agreed on eighteen people to be included in the jury. The court swore in twelve of these, nine women and 3 men, for the hearing. They will hear the evidence and arguments brought against or in favor of SBF to determine his guilt or innocence.
An additional six people now remain as alternatives. They will replace jurors if the court removes any of the current jurors or if they cannot dispense their duties at any point in the trial.
According to reports, here is what the jury panel looks like:
1) Female: 39 years old, works as a physician assistant.
2) Female: 32 years old. A nurse by profession, she works in Westchester, New York.
3) Female: 40 years old. She is a social worker but is currently unemployed.
4) Female: 53-year-old. A graduate of Duke University. She is a divorcee who previously worked in nonprofit organizations managing fundraising efforts. She is a mother of two.
5) Male: 59 years old. Believed to be a consultant. Married, has three kids.
6) Female: 50 years old, mother of five. She is employed as a train conductor. Two of her kids have reportedly been convicted of crimes.
7) Female: A 47-year-old high school librarian.
8) Female: She is a 65 years old retired corrections officer
9) Male: The 61-year-old US Postal Service (UPS) employee. Not married and has no kids.
10) Female, 32 years old. Works in advertising and has two kids.
11) Female: The 55-year-old works as a special education teacher in New York.
12) Male: A 68-year-old retired investment banker at Salomon Brothers.
Oct. 3, 2023: DOJ Preserves Charges on SBF
The US Department of Justice stated that the lack of a well-defined legal framework for cryptocurrencies in the country does not hinder the pursuit of fraud charges against Sam Bankman-Fried.
The rebuttal came after Sam Bankman Fried’s defense team argued that he should not be considered guilty because FTX was not subject to US regulations. According to the DOJ, this argument is irrelevant.
The Justice Department contended that while legislation may establish a legal obligation, the absence of such regulation does not absolve the defendant of the charges, particularly when customers’ funds are involved.
Because SBF is accused of making substantial misrepresentations to customers and misappropriating their funds, his alleged actions remain subject to legal scrutiny.
This legal maneuver underscores the DOJ’s commitment to prosecute financial crimes in the cryptocurrency space. It signals individuals and entities in this sector to adhere to existing laws and regulations governing asset protection and financial transparency.
According to Law 360, the US government’s legal team includes Danielle R. Sassoon, Nicolas Roos, Danielle Kudla, Samuel Raymond, and Thane Rehn from the US Attorney’s Office for the Southern District of New York. Jil Simon from the US Department of Justice’s Criminal Division also joins at the plaintiff’s table.
Meanwhile, Bankman-Fried is represented by Mark S. Cohen, Christian R. Everdell, S. Gale Dick, Sri K. Kuehnlenz, Sharon L. Barbour, David F. Lisner, Alexandra K. Theobald, and Drew S. Dean from Cohen & Gresser LLP.
Oct. 3, 2023: Former Trump Staffer, Anthony Scaramucci, to Testify
As the first day of Sam Bankman-Fried’s trial commenced, details about the possible developments became clear.
The opening session in the jam-packed courthouse confirmed the potential list of witnesses that would testify against SBF. It also set in motion the process to select the jurors that will serve on a jury during a jury trial.
The list of witnesses came from Assistant US Attorney Danielle Sassoon, one of the prosecutors in the case. As speculated, it included former Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, former FTX engineering director Nishad Singh, and former FTX chief operating officer Constance Wang.
It’s noteworthy that Ellison, Gary Wang, and Singh have already pleaded guilty to charges related to their involvement in the FTX collapse.
Prosecutor Nicolas Roos clarified that they had never discussed nor offered a potential plea deal to Bankman-Fried.
Meanwhile, Ryan Salame, the former co-CEO of FTX Digital Markets, will not testify. He is the fifth individual from the defuncted crypto exchange directly associated with the criminal case.
According to reports, the prosecutors intend to question SBF’s parents, Joseph Bankman and Barbara Fried. Anthony Scaramucci, founder of SkyBridge Capital and a friend and business partner of Bankman-Fried, will also likely be called to the stand. He previously had a ten-day stint as the White House Director of Communications from July 21 to July 31, 2017.
Alfred Lin from venture capital investor Sequoia Capitaland and Zac Prince, CEO of the bankrupt crypto company BlockFi, will also feature on the potential list of witnesses.
The prosecution has also listed several institutions. These include Jane Street Capital Genesis, the Ontario Teachers’ Pension Plan, Binance, Nexo, and Voyager Digital.
Guarding Against Pandemics, the nonprofit of SBF’s brother Gabriel Bankman-Fried is also on the witness list.
Meanwhile, the presiding judge, Lewis B. Kaplan, informed Bankman-Fried that he could choose whether or not to testify in his defense.
Oct. 3, 2023: The jury selection is halfway through
The first day of the trial also saw the selection of potential jurors who would form the jury in the case. Judge Kaplan instructed the group from which lawyers will select the jury.
According to witnesses in the court, he instructed them not to dwell on media reports or articles that could hinder their fair judgment or make them conclude even before the trial concludes.
During the vetting process, several of them were excluded from the list. One such juror had lost money due to the collapse of Bankman-Freid’s FTX. Another juror disclosed their association with a company that had invested in FTX and Alameda, resulting in financial losses.
At the end of the process, the court had selected 50 people as the jury pool. On the second day of trial, on Oct. 4, the prosecution and defense lawyers will question them to select a jury.
Judge Kaplan clarified that the jury will comprise a total of 18 individuals. Of these, 12 will serve as jurors, and six will remain alternates.
Opening arguments are expected to kick off the next day after the jury is finalized.
Oct. 3, 2023: Sam-Bankman Fried is Facing Seven Counts of Charges — What Are They?
The 31-year-old will face seven counts of wire fraud, securities fraud, and money laundering or conspiracy to commit these crimes. Here is a dive into these charges.
Sam Bankman-Fried stole customer funds
According to the cases brought against him, SBF stands accused of misappropriating customer funds to address financial shortfalls at Alameda Research, his cryptocurrency hedge fund.
As per the allegations, he utilized the diverted funds for various illegal purposes. These include investments made using the money from FTX deposits. Moreover, he acquired real estate in the Bahamas, where he lived before his arrest and extradition.
The now-disgraced crypto mogul also made contributions to US political campaigns using customer funds. To hide their source, he used dummy donors to conceal or obscure the origin of the funds.
There are four charges against him under the misappropriation of customer assets. These include one count of wire fraud, two counts of conspiracy to commit fraud, and one count of conspiracy to commit money laundering.
According to Nigel Green, CEO and founder of deVere Group, the trial will have implications for the entire crypto industry.
“The importance of this case cannot be underestimated. Not only for SBF, who faces 110 years of prison time, and the victims, But also for digital currencies themselves – which are widely regard as the future of money.”
Green said.
SBF lied to investors and lenders, according to prosecutors
Sam Bankman-Fried had granted Alameda Research an unfair trading advantage on FTX. This included an unlimited credit limit with the exchange, allowing Alameda to conduct transactions even with a negative balance.
He then directed FTX’s top executives to hide the over $8 billion in liabilities in a fake customer account which he called “our Korean friend’s account” or “the weird Korean account.”
Prosecutors now allege he concealed this substantial borrowing from the auditors. As a result, the financial statements of FTX did not reveal the real financial health of the exchange.
Investors and lenders, therefore, felt reassured of the company’s risk management. Meanwhile, it was in shambles.
Furthermore, on Bankman-Fried’s proposal, Caroline Ellison, the former CEO of Alameda, provided false information to the fund’s creditors concerning the borrowed funds from FTX. She did this to dissuade creditors from recalling their loans.
Ellison has already pleaded guilty on several counts. She will provide testimony against SBF during the trial.
Under these charges, Bankman-Fried faces one count of wire fraud and two conspiracy counts.
What happened to the other charges against SBF?
Originally, Bankman-Fried faced a total of 12 charges. However, the prosecutors have separated five charges: bank fraud and foreign bribery conspiracy. He will end with a second trial scheduled for March 2024.
One of these charges asserts that Bankman-Fried breached the US Foreign Corrupt Practices Act by allegedly offering a $40 million bribe to one or more Chinese officials to release frozen Alameda Research accounts.
Furthermore, in July 2023, prosecutors dropped one charge alleging conspiracy to violate US election laws. This decision came after the Bahamas authorities clarified that they had never intended to extradite him to face trial on that specific charge.
However, prosecutors will still argue during the October 3 trial that Bankman-Fried’s political donations were a component of his broader fraud scheme.
According to the CEO and founder of deVere Group, the trial can help instill confidence in the industry.
“A meticulously conducted trial resulting in appropriate repercussions will inevitably boost trust among investors in the asset class. This trust would further attract investors, especially institutional investors, who bring huge capital, expertise and influence, thereby contributing to crypto’s broader acceptance,”
Nigel Grees argues.
CoinChapter will post regular updates from the trial on this page.
Sam Bankman-Fried’s romantic life comes to bite him
The cryptocurrency industry is abuzz with anticipation as the trial of Sam Bankman-Fried, the renowned founder of crypto exchange FTX, is slated to commence on October 3, 2023. This high-profile trial has garnered significant attention.
The testimony of Caroline Ellison, the former head of trading firm Alameda Research and Bankman-Fried’s alleged former girlfriend, has become the highlight of the upcoming trial.
In November 2022, FTX, once seen as a challenger to Binance, crashed. The company faced serious liquidity issues owing to gross mismanagement of funds.
Further investigations revealed that Alameda Research had engaged in high-risk investments using customer funds from its affiliated cryptocurrency exchange, FTX. The trading firm was a segment of SBF’s empire.
However, the funds, over $8 billion, never came back to the exchange. Instead, Alameda used them to service its debts to its creditors.
Meanwhile, Caroline Ellison has maintained that she took the funds on Bankman-Fried’s directive. She has cut a deal with the prosecutors and is determined to testify against his former boss and boyfriend.
But, although she could do most damage, she is not the only one. FTX co-founder Gary Wang and engineering director Nishad Singh will also point fingers at SBF.
Ellison has pleaded guilty to seven criminal counts. She faces up to 110 years in jail. However, his lawyers are hoping to get a much lighter sentencing. As often happens, she has allegedly offered her testimony in exchange for a deal.
Meanwhile, Bankman-Fried has pled not guilty to the charges. Notwithstanding, in August 2023, a federal judge revoked his bail and sentenced him to jail awaiting trial.
His legal team will now argue that there is insufficient proof that he directed Elison to commit those crimes.
Once she steps into that witness box, things will turn messy. Many slots could fall out of the closet she is about to open.
SBF wanted to pay Donald Trump to keep him out of the White House
In what comes as a new shocking revelation, Sam Bankman-Fried allegedly contemplated offering former US President Donald Trump a substantial sum to abstain from running for reelection in 2020.
The details of his alleged plan are in an upcoming book titled “Going Infinite: The Rise and Fall of a New Tycoon,” authored by Michael Lewis.
In an interview with 60 Minutes, Lewis narrated the entire episode. According to him, he had received a quote of $5 billion. It is yet unsure who gave him that price. However, that was the amount Trump allegedly wanted to drop out.
Moreover, SBF met with Republican Senate minority leader Mitch McConnell over dinner. He wanted to contribute “tens of millions” dollars to push anti-Trump candidates.
The disgraced SBF chief believed Donald Trump was “a threat to democracy.” Therefore, he was willing to shell out cash to stop him.
“He took to the view, that all the big existential problems are going to require the United States Government to be involved to solve them. And if democracy is undermined… all these problems are less likely to be solved. He saw Trump trying to undermine democracy and he thought Trump belongs on the list of existential risks”
SBF’s biographer said.
However, as Lewis explains, FTX crashed, and he lost his wealth before he could do it. Nonetheless, SBF was very generous in its political donations. He contributed to the election campaigns of both Republicans and Democrats.
