Opening arguments begin in Sam Bankman-Fried trial

    2023.10.05 | exchangesranking | 1283onlookers

    Prosecutors and defense attorneys in the criminal case of former FTX CEO Sam Bankman-Fried, also known as SBF, painted a very different picture for the jury to consider during the trial.

    In a New York courtroom on Oct. 4, Assistant United States Attorney Thane Rehn and SBF’s attorney Mark Cohen delivered opening arguments to a jury of 12 people on the events leading up to the collapse of crypto exchange FTX as well as Bankman-Fried’s alleged role. The remarks followed Judge Lewis Kaplan finalizing a selection of 12 members of the jury and six alternates after more than a day of questioning roughly 50 people.

    According to an X (formerly Twitter) thread from Inner City Press at the event, Rehn claimed in court that SBF used FTX customer funds to enrich himself as well as convince lawmakers — through campaign donations and testimony — that he was trustworthy. The assistant U.S. attorney reportedly argued that Bankman-Fried repeatedly lied to users, employees, lawmakers and the general public regarding “the hole” FTX found itself in during November 2022 when financial information on the exchange was released.

    “The hole was too big,” said Rehn. “So the defendant blamed a downturn in the crypto market. But he had committed fraud. That is what the evidence in this trial will show. You will hear from his inner circle. His girlfriend will tell you how they stole money together.” 

    Cohen, who delivered his opening statement after Rehn, reportedly blamed some of the issues leading to FTX’s downfall on SBF’s former girlfriend and former Alameda Research CEO Caroline Ellison as well as Binance CEO Changpeng Zhao, or CZ. He claimed Ellison had failed to act to hedge some of Alameda’s investments despite Bankman-Fried’s urging to do so and that CZ’s social media posts had directly led to a run on FTX.

    SBF’s defense team presented the former FTX CEO as someone who “acted in good faith” amid a company growing exponentially in a volatile crypto market. He also pushed back against the narrative SBF was a “bad guy” by spending funds, with a penthouse in the Bahamas and paying celebrities to endorse FTX, saying: “It’s not a crime to try to get Tom Brady.”

    “Alameda took big margin loans from FTX,” said Cohen, according to reports. “Nothing wrong with that. Alameda was a market maker. Nothing wrong with that. FTX at first didn’t have a bank account to accept dollars, which in the crypto world are called fiat. So, they used an Alameda account.”

    Related: 5 highlights of Sam Bankman-Fried’s first day of trial

    Oct. 4 marked the second day of Bankman-Fried’s first criminal trial, which is expected to last roughly six weeks. He has pleaded not guilty to seven charges related to alleged fraud at FTX and will appear in court again in March 2024 for a second trial. 

    Among the highlights of SBF’s first week in court included the former FTX CEO appearing with a new haircut for the first time. Ellison, along with other former executives connected to the crypto exchange, may testify against SBF as the trial continues.

    Magazine: Can you trust crypto exchanges after the collapse of FTX?

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