“Acted in good faith.” The first days of the Bankman-Fried trial


On October 3, hearings began in the case of the former head of the collapsed FTX, Sam Bankman-Fried (SBF). The parties selected jurors and made opening statements.

SBF is charged with seven criminal counts, including conspiracy to defraud. He pleaded not guilty to any of the charges.

The trial is being presided over by U.S. District Judge Lewis Kaplan, who has previously presided over other high-profile hearings, including those involving Guantanamo Bay detainees, the Gambino crime family, Prince Andrew and former President Donald Trump.

According to Bloomberg, half of the first day of the trial was spent on jury selection. In the end, nine women and three men were chosen. One of them is a 68-year-old US citizen with a master’s degree from Stanford University, where SBF’s parents studied.

Judge Kaplan gave jurors a brief overview of the case, noting that Bankman-Fried is accused of defrauding clients and investors of FTX and Alameda Research without disclosing the extent of the crime or even explaining that his company had gone bankrupt.

Later, the defense and prosecution made their first statements. According to Inner City Press, the judge compared opening statements to movie trailers.

The US Department of Justice took a tough stance against Bankman-Fried, calling the FTX founder a man who deliberately lied to investors in order to enrich himself and expand his crypto empire.

According to prosecutors, SBF defrauded customers by using Alameda as a “key partner to steal funds.”

A man with a poster in front of the courthouse. Data: Cointelegraph.

Apparently, the Ministry of Justice will focus its arguments on the fact that the ex-head of FTX deliberately misled creditors about the safety of their funds.

Former FTX and Alameda employees Caroline Ellison, Gary Wang and Nishad Singh will provide jurors with inside information about Bankman-Fried’s role in the alleged crimes, prosecutors said. However, the defense pointed out that as part of the cooperation agreement they had agreed to testify against SBF, which raised doubts about their credibility.

Ellison and Wang previously pleaded guilty to charges related to the collapse of the platform and agreed to assist the investigation. The former head of Alameda Research spoke about the manipulation of the price of the FTT utility token.

Ellison also admitted to knowingly defrauding creditors. She said she “knew it was wrong.” She and SBF hid agreements from investors and falsified financial statements.

Bankman-Fried’s lawyers said he “acted in good faith” and placed some of the blame on Ellison. The defense denies the existence of secret transactions between Alameda and FTX. According to lawyers, all transactions were legal or carried out by the head of the exchange with good intentions during a market downturn.

The lawyers also highlighted Binance’s role in the bank run that led to the collapse of FTX.

The lawyers emphasized that SBF considered the lending transactions to Alameda legal as part of a business relationship.

“There was no theft. It is not a crime to be the CEO of a company that files for bankruptcy,” the lawyers concluded.

After opening statements, the jury heard testimony from two witnesses – French trader and former FTX client Mark Julliard, and SBF friend Adam Yedidia.

The first said that at the time of the collapse of the crypto exchange, he had 4 BTC in his accounts worth almost $100,000. According to him, FTX’s marketing tactics gave him confidence about the security of the platform.

Yedidia spoke about his acquaintance with SBF at the university and shared his first experience of business cooperation with it. The witness worked at Alameda as a trader in 2017, but in 2021 moved to FTX as a developer.

Let us recall that in September, lawyers assessed Bankman-Fried’s chances in court. They examined the charges and calculated the possible sentence for the accused.

Found an error in the text? Select it and press CTRL+ENTER

ForkLog newsletters: keep your finger on the pulse of the Bitcoin industry!

Leave a Reply