Sam Bankman-Fried Trial Is Under Way – Prosecutors Say His Crypto Empire Was ‘Built on Lies’ – Defense Says He ‘Acted in Good Faith’
The high profile trial of Sam-Bankman-Fried is under way, and right from the start, it became clear that Caroline Ellison, former CEO of Alameda Research (and Sam Bankman-Fried’s former girlfriend) was going to become the focal point of the FTX founder’s fraud trial in New York.
Sam Bankman-Fried, the second largest Democrat donor after George Soros, is alleged to be ‘the mastermind and leader of a multi-year criminal scheme that involved defrauding investors, lenders, and retail customers of billions of dollars, and spending fraud proceeds to corruptly influence United States politics’.
Prosecutors allege that SBF told Ellison and his closest co-workers about misusing customer funds, as he ‘lied to the world’ about the (lack of) safety of his crypto platform.
Meanwhile, his defense said the disgraced crypto-bro relied on Ellison to run Alameda, and ‘when he asked her to hedge Alameda amid market uncertainty last year, she didn’t do it’.
Bloomberg reported:
“Opening statements […] hinted at the strategy both sides will use to sway the jury in the historic trial, including relying on the involvement of Bankman-Fried’s inner circle in the FTX collapse. Ellison is expected to testify as the government’s star witness, after reaching a cooperation agreement along with two other executives.
Nathan Rehn, an assistant US attorney, on the first day of the fraud trial painted Bankman-Fried, 31, as a calculated criminal who used investor deposits at FTX as a personal bank account before the company collapsed into bankruptcy a year ago. He pulled money out of FTX to cover his loans, filed false financial statements and testified to Congress, untruthfully, that FTX wasn’t using customer money.”
Alameda Research was allowed to borrow limitless amounts from FTX and use it for trading and other activities, including political donations.
“Bankman-Fried ‘had wealth, he had power, he had influence, but all of that was built on lies’, Rehn told jurors. ‘He was committing a massive fraud, and taking billions of dollars from thousands of victims’.”
The defense lawyers blamed Alameda for the ultimate shortfall of customer funds, stating that SBF ‘acted in good faith and took reasonable business measures’.
“The case in many ways is about crypto from 2017 to 2022,” [defense lawyer] Cohen said. ‘You will learn that crypto is not for everyone’, and added that ‘it’s not a crime to run a company that ends up going through a storm’.”
FTX developer Adam Yedidia was the first to testify, and stated that he warned SBF against dating Caroline Ellison, who is now expected to testify against him at trial — a former SBF colleague and friend just told the jury.
New York Post reported:
“‘In early 2019, the defendant told me that he and Caroline had had sex, and he thought they should date’, said Adam Yedidia, Bankman-Fried’s college friend from MIT and a former FTX developer.
‘What did you say?’ asked federal prosecutor Danielle Sassoon. ‘I said no’, Yedidia responded.
‘And what did he say?’ Sassoon asked.
‘He said, he figured it’s what he’d thought I would say’, Yedidia responded.”
Prosecutors also released photos of the $35 million Bahamas penthouse where Bankman-Fried and his colleagues lived in the months before FTX’s November 2022 collapse.
Also introduced in the record were advertisements into evidence featuring football star Tom Brady, comedian Larry David and supermodel Gisele Bundchen, all touting FTX as a ‘safe and easy way’ to trade crypto.
Read more about SBF’s trial:
DEVELOPING: Crypto Scammer Sam Bankman-Fried Jailed Over Witness Tampering
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