That answer ultimately rests with the jury, which was selected Wednesday morning before government lawyers before Bankman-Fried traded two contrasting stories about the former cryptocurrency tycoon’s sudden rise and almost instant fall. .
Here’s what happened on the second day of the trial, which included searing accusations, friends from MIT and a big-shot audience that included Bankman-Fried’s professor parents and U.S. Attorney for the Southern District Damme Ann Williams.
A conscious criminal…
Bankman-Fried sat between two attorneys and stared at a laptop for much of the courtroom, where the prosecutor’s description of Bankman-Fried’s alleged crimes contrasted with a study.
“A year ago, it seemed like the defendant was on top of the world,” government prosecutor Thane Rehn said in his opening statement. The former FTX CEO oversaw a supposedly thriving cryptocurrency exchange that traveled internationally and hobnobbed with celebrities like Tom Brady. Larry David. He repeatedly stressed to his customers that their money was safe and secure.
But “all of this, all of this, is based on lies,” Wren declared to the jury. “Behind the scenes, he was not what he seemed.” What follows is a roughly 30-minute story that repeatedly highlights Bankman-Fried’s alleged theft of client funds to promote his jet-setting lifestyle, pitch to political candidates Donate millions of dollars and fund risky bets.
What was the key to his alleged plan? Wren said he also owns Alameda Research, a cryptocurrency hedge fund. The government alleges that Bankman-Fried used his on-again, off-again girlfriend and Alameda CEO Caroline Ellison as a front to “secretly access” clients’ funds, including cash. and cryptocurrencies).
Additionally, Bankman-Fried allegedly directed employees to conceal funds flowing into FTX’s vaults and to falsify financial documents distributed to lenders and investors. “The defendant lied to the world,” Lane claimed.
Who is this defendant?Not a cryptocurrency “boys” Genius, like many in the media (wealth including) has written, But a “man“ Lane said they “stole billions of dollars from thousands of victims.” “You’ll see the whole picture.”
…or a founder with good intentions?
But after Bankman-Fried spent about seven weeks in a Brooklyn jail, his cheekbones became more prominent, and according to Mark Cohen, one of Bankman-Fried’s attorneys, he was not a liar. “Sam didn’t deceive anyone,” he said in his opening statement.
The jury will see a nerdy startup founder who acted with “good intentions,” not the prosecutor’s “villain caricature.” (Cohen repeatedly emphasized Bankman-Fried’s alleged act of kindness in his address to the jury.)
Alameda is not underground or shady. It’s a successful hedge fund, he said. FTX is not a Ponzi scheme. It’s a “very innovative, successful company.” He argued that the business conduct between the two was reasonable and claimed that Alameda lawfully acted as a financial entity for FTX customers, a payment processor and market maker, or a trading partner for customers seeking to buy and sell cryptocurrencies.
He used an analogy in his opening remarks, saying “working in a startup is like building a plane and flying it” and that businesses sometimes fail. In fact, he specifically took aim at former Alameda CEO Allison, whom he said did not adequately protect her hedge fund from the risks inherent in the cryptocurrency market.
As the fence drew closer and the above-mentioned aircraft approached the “eye of the storm,” Bankman-Fried did not act like a guilty man. Instead, Cohen argued, he was willing to give up personal wealth to make his clients whole.
“Ultimately, Sam started and built a $2 billion business,” he concluded. “He didn’t steal any money.”
Frenchman living in London testifies in New York
After attorneys for both sides described two distinct Bankman-Fried families, prosecutors called the first two witnesses to testify — and they were not big names like Ellison, a former lieutenant-turned-Lieutenant. For government collaborators.
The first was the victim: Marc-Antoine Julliard, a cocoa merchant who was born in Paris and now lives in London. In 2021, Julliard, who has a haircut and speaks with a thick French accent, decided to invest in cryptocurrencies and chose FTX as his exchange, where he trades cryptocurrencies such as Bitcoin and Dogecoin.
On November 8, during his final days on the cryptocurrency exchange, he attempted to withdraw cash and cryptocurrencies. How many? Nearly $100,000, he said. Can he do it? “Never,” he told prosecutors.
Soon after, as the trial neared late afternoon, the government called Adam Yedidiya to testify. He was a fast-talking MIT graduate, and he and Bankman-Fried were close friends in college, he said. After Bankman-Fried left Jane Street, the high-frequency trading firm where the former billionaire got into finance after graduating from MIT, he convinced Yedidia to join him at Alameda worked as a trader and then as a developer at FTX.
When Yedidia first took the stand, Danielle Sassoon, one of the lead prosecutors, said Bankman-Fried’s college friend had legal immunity while testifying. Why, she asked, would he make such a deal with the government.
“I’m worried that I’ve inadvertently written code that leads to crime,” he said.
However, as the time quickly approached 4:30 p.m., the court adjourned. Yedidia’s testimony will continue on Thursday, followed by Matt Huang, a former partner at the powerful venture capital firm Sequoia Capital, and then Gary Wang, a key aide to Bankman-Fried and one of the government’s star witnesses.
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