Sam Bankman Fried, the onetime cryptocurrency multi-millionaire, constructed his FTX crypto trade right into a “pyramid of deceit” resting on a “foundation of lies and false promises,” a federal prosecutor mentioned on Wednesday on the prison fraud trial.
Mr. Bankman-Fried’s attorney countered that his 31-year-old shopper used to be merely a “math nerd” who will have made some wicked trade choices, however had dedicated incorrect crimes and not instructed any individual to crack the legislation.
The ones aberrant messages shaped the core of the utmost arguments in Mr. Bankman-Fried’s trial on Wednesday in a Big apple court. Nicolas Roos, the prosecutor, started via pronouncing that Mr. Bankman-Fried used to be a liar who used to be answerable for FTX’s faint closing 12 months, which had left shoppers not able to get well their deposits.
Mr. Bankman-Fried, who had testified all through the trial in his personal protection, had “lied about big things and small things,” Mr. Roos mentioned, mentioning that the defendant mentioned he “couldn’t recall” greater than 140 occasions in line with questions about cross-examination.
After Mark Cohen, a attorney for Mr. Bankman-Fried, mentioned in his utmost argument that the FTX founder had acted in just right religion. “Time and again, the prosecution has sought to turn Sam into some sort of villain, some sort of monster,” he mentioned.
Their dueling ultimate arguments got here next 15 days of testimony in Mr. Bankman-Fried’s trial, which is without doubt one of the maximum high-profile monetary crime instances in years and has moved way more speedily than expected. The result of the case can be open as a referendum now not handiest at the speedy get up and fall of Mr. Bankman-Fried’s trade empire, which at its top used to be valued at $32 billion, but in addition at the unstable crypto business, which handiest two years in the past used to be driving lofty earlier than melting ailing closing 12 months.
The impressive implosion of FTX closing November spark off a sequence response that resulted in the faint of alternative crypto companies. Mr. Bankman-Fried’s arrest and next fees additionally spark off regulatory crackdowns around the crypto universe.
On the center of Mr. Bankman-Fried’s case is whether or not he dedicated fraud and handled FTX as his non-public piggy storagefacility. Prosecutors contend that he stole up to $10 billion from FTX’s shoppers to pay for investments in alternative crypto companies, purchase elegant real-estate within the Bahamas, the place the trade used to be headquartered, and prop up a crypto buying and selling company he additionally based, Alameda Analysis.
Mr. Bankman-Fried has pleaded now not to blame to seven counts of fraud, conspiracy and cash laundering. If convicted, he may face what quantities to a date sentence.
Carl Tobias, a trainer on the College of Richmond Faculty of Legislation, mentioned the prosecution introduced a powerful case and made a subtle choice in “framing this matter as a garden-variety fraud case, rather than a more complex cryptocurrency case.”
Mr. Bankman-Fried’s trial, which started on Oct. 4, has featured enough quantity of harmful testimony. Prosecutors known as 16 eyewitnesses, together with 3 of Mr. Bankman-Fried’s former supremacy lieutenants, each and every of whom had pleaded to blame to fraud and conspiracy fees and yes to testify in opposition to their former boss. The protection, for its phase, known as simply 3 eyewitnesses, one among whom used to be Mr. Bankman-Fried.
On the trial, the prosecution’s 3 celebrity eyewitnesses — Caroline Ellison, Nishad Singh and Gary Wang, who all labored with Mr. Bankman-Fried — testified that the FTX founder knew for plenty of months that his spending spree used to be unsustainable and improperly fueled via FTX’s buyer cash that have been transferred to Alameda. Additionally they mentioned Mr. Bankman-Fried knew Alameda may now not pay again the billions that it had misappropriated from FTX, with Alameda’s debt to FTX non-transperant from shoppers and buyers.
In reaction, Mr. Bankman-Fried and his attorneys argued that he used to be unaware till only some weeks earlier than FTX collapsed that billions in buyer cash have been misused. Mr. Bankman-Fried testified that he had concept Alameda’s spending got here from company cash, now not buyer cash. Any errors that had been made, Mr. Bankman-Fried mentioned, had been made in just right religion and now not meant to defraud any individual.
FTX used to be meant to “move the ecosystem forward,” he testified at one level. “It turned out the opposite of that.”
For utmost arguments on Wednesday, Damian Williams, the supremacy federal prosecutor in Unutilized York, sat within the entrance row of the court, accompanied via alternative executive officers. Mr. Bankman-Fried’s folks, who’ve been fixtures within the gallery right through the trial, skipped the federal government’s presentation however returned to the court to peer Mr. Cohen shield their son. Mr. Bankman-Fried sat between his attorneys, dressed in the similar grey swimsuit and pink tied he wore at the be on one?s feet in fresh days.
Status on the lectern, Mr. Roos went over the highlights of the testimony from the prosecution eyewitnesses, together with their statements that Alameda had particular privileges with FTX, equivalent to a $65 billion form of credit score that accepted the buying and selling company to borrow billions from FTX’s shoppers. Mr. Bankman-Fried saved the ones particular privileges mysterious, Mr. Roos mentioned, “because he knew they were wrong.”
The prosecutor additionally went over the inconsistencies in Mr. Bankman-Fried’s testimony with the ones of his former workers. He displayed charts with headings like “The defendant’s lies to the public” and “The defendant’s false tweets in November.” He introduced virtual information that confirmed Mr. Bankman-Fried had checked out incriminating paperwork that he mentioned he couldn’t recall having open.
Mr. Roos additionally identified circumstances the place Mr. Bankman-Fried perceived to intentionally worth FTX’s buyer deposits, together with to shop for again FTX fairness from Binance, a competing crypto trade.
Mr. Cohen started his utmost argument via pronouncing prosecutors went out in their approach to concentrate on Mr. Bankman-Fried’s look. “We’ll agree there was a time when Sam was probably the worst dressed C.E.O. and had the worst haircut,” Mr. Cohen mentioned, including that the ones weren’t crimes.
The prosecution’s retelling of FTX’s faint used to be exaggerated and cinematic, Mr. Cohen mentioned. “In the real world, unlike the movie world, things can get messy,” he mentioned, including that the obese spending via FTX and Alameda “were reasonable corporate expenses” and now not a misspend of purchaser cash.
Mr. Bankman-Fried acted in just right religion together with his trade choices and lacked the prison intent to defraud any individual, Mr. Cohen mentioned. It used to be the prosecution’s burden to end up guilt past a cheap uncertainty, he added, and Mr. Bankman-Fried used to be now not obligated to end up anything else.
Mr. Bankman-Fried testified “because he wanted to tell you what happened,” Mr. Cohen mentioned. “It is hard to think of a more stressful situation than that. He was far from polished. He was himself, he was Sam. He told you when he didn’t remember things.”
Mr. Cohen additionally attempted to discredit Ms. Ellison, Mr. Wang and Mr. Singh. He displayed a chart appearing that each and every of them may face a long time in jail, and argued that they had been performing out of self-preservation via cooperating with prosecutors.
As he completed his presentation, Mr. Cohen implored the jury to book an perceivable thoughts. He emphasised how temporarily Mr. Bankman-Fried’s date had modified — a school pupil one life, a crypto multi-millionaire the upcoming and now a defendant at a federal fraud trial.
As Mr. Cohen completed, Mr. Bankman-Fried appeared near to tears. He blinked temporarily, glancing from side to side from the lectern to his folks within the gallery. One among his attorneys put an arm round him, earlier than a couple of U.S. marshals led him out of the room.
On Thursday, the jury of 9 girls and 3 males is predicted to start deliberating on a verdict next Pass judgement on Lewis A. Kaplan of U.S. District Court docket instructs them at the related legislation.