As FTX teetered on the verge of bankruptcy in early November 2022, the inner circle surrounding the cryptocurrency exchange’s founder, Sam Bankman-Fried, began to unravel.
Caroline Ellison, chief executive of FTX sister company Alameda Research, is in Hong Kong and expressed relief that she will soon be able to escape the pressure of the company’s financial woes. As the full scale of the damage and possible consequences come into focus, colleagues at FTX headquarters in the Bahamas are increasingly concerned about the mental health of engineering director Nishad Singh.
Gary Wang, Bankman Fried’s co-founder and top lieutenant, remained stoic as the company slid toward bankruptcy. Shortly after consulting U.S. lawyers, he eventually left the penthouse he shared with Bankman-Fried and other FTX executives. Wang, Allison and Singer have since pleaded guilty.
The four former friends and once-extremely wealthy millennials will reunite for the first time in a Manhattan courtroom in the coming weeks as Bankman Fried goes on trial on fraud charges. Here are some of the central figures in the most high-profile trials in cryptocurrency’s short history.
defendant
Sam Bankman-Freed
Bankman-Fried grew up on the fringes of Stanford University’s campus, the son of two respected legal scholars. He hated school and found it boring, but he excelled in math competitions and later studied physics at MIT. He also joined followers of the Effective Altruism philosophical movement, which preached that philanthropy was based on a mathematical assessment of the greatest good for the greatest number of people.
Bankman-Fried, 31, has promoted philanthropy and founded two businesses: Alameda, a private cryptocurrency trading company in 2017, and then launched a public-facing cryptocurrency trading platform in 2019 FTX. FTX’s success is backed by some investors. Help from the world’s top investors made him a billionaire and gave him international fame.
But after cryptocurrency prices plummeted in 2022 and a leaked Alameda balance sheet led to a run on FTX, Bankman-Fried gave in to pressure and forced FTX into bankruptcy — a decision he said he regrets. He defied expectations that he would plead guilty in the hope of a lighter punishment and repeatedly sought to reflect his views to the media while awaiting trial. He believes that FTX’s collapse was due to a well-intentioned mistake. Before his arrest, he prepared testimony for a congressional committee that began: “I want to start by officially swearing: I screwed up.”
star witness
caroline allison
Allison, 28, and Bankman-Fried grew up on parallel tracks. The child of an MIT academic, Allison also competed in high school math competitions before moving to California to attend Stanford University. They met as merchants on Jane Street. Shortly after Bankman Fried quit the trading company, Allison followed him back to California to join Alameda.
The two became romantically involved, although the nature of their relationship is unclear. Personal turmoil meant that, at times, they barely spoke.
Still, after Bankman-Fried officially resigned to focus on FTX, Ellison remained trusted by Alameda’s leadership and played an important role in the lending relationship that is now the focus of fraud allegations. In December, she and Wang pleaded guilty to fraud and agreed to cooperate with prosecutors — Bankman-Fried said in a dramatic late-night press conference after agreeing to be extradited from the Bahamas and boarding a plane to New York. This fact was announced.
As FTX collapsed at the end of 2022, she wrote to Bankman-Fried: “My fear of this day is growing… Now that this is really happening, it feels great to have it all over.”
loyal lieutenant
Wang Jiali
Wang was Bankman-Fried’s stoic right-hand man until late last year. FTX’s co-founder and chief technology officer has almost no public profile. Colleagues said they had barely spoken to him. But he built and maintained much of the cryptocurrency exchange’s technology while apparently trusting his old friend Bankman-Fried to run the business.
The two met at Canada-USA Math Camp, a summer program for high school students. Both attended MIT. They join the same co-ed fraternity, Epsilon Theta, where members indulge not in raucous parties but in marathon sessions playing strategy board games and lengthy moral debates. Wang quit his job at Google to help start Alameda.
Prosecutors allege that his central role in setting up FTX included inserting secret parameters into the exchange’s code that gave Alameda the right to borrow $65 billion – many times more than the exchange held. Wang pleaded guilty to fraud and told the court that he made changes to FTX’s code and that “he was aware that others had represented to investors and customers that Alameda did not have such privileges, and that part of the reason people invested in and used FTX may have been because of these misrepresentations.” ”.
child prodigy
Nishad Singh
The youngest member of FTX’s inner circle, Singer attended the same elite California private school as Bankman-Fried and his younger brother Gabe. As a student, he once ran a 100-mile race. After graduating from UC Berkeley, he landed a “dream job” at Facebook, but spent his evenings and weekends working on Bankman-Fried’s crypto projects at the Alameda office.
He joined full-time and became Wang’s No. 2 engineer. Colleagues remember an energetic and personable young man whose sunny attitude matched the lone genius. Singer’s pet Labrador became a firm favorite.
He pleaded guilty to fraud and campaign finance violations. “Your honor, I am deeply sorry for the role I played in all of this and the harm it caused. I hope that by taking responsibility, assisting the government, and forfeiting assets, I can begin to right the wrongs,” he said at the time.
Judge
Louis Kaplan
Kaplan is a veteran of the Southern District of New York and has served as a federal judge since 1994 when he was appointed to the bench by then-President Bill Clinton. He has presided over many high-profile cases, including the first trial at Guantanamo Bay. Gulf detainees were tried in non-military courts. Most recently, he oversaw a civil case in which journalist E Jean Carroll successfully sued former President Donald Trump for rape and won a $5 million settlement.
“He’s known as a very tough, no-nonsense judge, but also very smart. He’s by no means an ideologue,” said Bradley Simon, a criminal defense partner at Schlam Stone & Dolan. He added that Kaplan — who often congratulates lawyers if he finds their arguments impressive and loves to make self-deprecating jokes — “doesn’t suffer fools gladly.”
So far, Kaplan has largely sided with the government on pretrial motions and has occasionally expressed his anger at Bankman-Fried’s bail conditions. He also rejected repeated requests from lawyers for Bankman-Fried, whose bail was revoked in August, to be temporarily released from jail to better prepare for trial.
Defense counsel
Mark Cohen and Christian Everdel
Bankman-Fried has two powerful former federal prosecutors backing him. Cohen founded his own firm more than 20 years ago and has defended Jeffrey Epstein partner Ghislaine Maxwell and others. One former colleague called him “one of the most respected attorneys” in white-collar law, known for his mastery of the law and careful, thoughtful arguments.
His co-counsel, Everdel, who also worked on the Maxwell case, was part of the team that killed Mexican drug lord Joaquín Guzman Loera before going into private practice.
While both men staunchly defended Bankman-Fried’s position, Cohen suggested he and his client disagreed over the best way to prepare a defense. In July, after prosecutors accused Bankman-Fried of trying to intimidate witnesses by leaking communications with Ellison to The New York Times, Cohen was brought before Kaplan, who admitted that his client’s behavior “may have may or may not be the best strategy,” but he has “the right” to “protect his reputation.”
Cohen and Everdel may have to appear in court with Bankman-Fried to defend themselves — something lawyers often advise against.
prosecutors
Nick Cruz and Danielle Sassoon
The prosecutorial team in the Bankman-Fried case included as many as eight different assistant U.S. attorneys at various stages, but most of the key briefs and arguments were spearheaded by Ruth, who won the Co-leader of the convicted team. car company founder Trevor Milton and Sassoon, a rising star in the office who worked on some of the nation’s biggest criminal cases.
After Bankman Fried was quickly indicted, Ruth and Sassoon had to deal with some bumps in the road, including repeatedly tightening bail conditions for the defendants. They also faced an unexpected challenge from the Bahamas, which said it might object to charges of campaign finance violations brought against Bankman-Fried after agreeing to extradite him to the United States. That charge was dropped, while five other charges, including one for allegedly bribing a foreign official, were dropped in a separate trial in March.
The government has not yet revealed who will deliver opening and closing arguments or who will examine star witnesses. But Ruth, who is known for tackling complex financial topics, and Sassoon, who clerked for Antonin Scalia on the Supreme Court, may be tasked with streamlining the jury’s verdict by focusing on Bankman-Fried’s alleged fraud. The world of cryptocurrencies, not the nuances of decentralized ledgers.
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