NEW YORK: Sam Bankman-Fried’s fraud trial kicked off this week, almost a 12 months after the FTX cryptocurrency trade he based declared chapter in a collapse that shocked markets and left the 31-year-old wunderkind’s popularity in tatters.
Bankman-Fried has pleaded not responsible to costs of stealing billions of {dollars} in buyer funds to prop up his crypto-focused hedge fund, Alameda Analysis. The trial is anticipated to last as long as six weeks. Listed here are 5 key moments from the trial’s first week:
PROSECUTOR SAYS BANKMAN-FRIED’S EMPIRE WAS “BUILT ON LIES”
Thane Rehn, a prosecutor with the Manhattan US Legal professional’s workplace, mentioned in his opening assertion on Wednesday that Bankman-Fried had been stealing FTX buyer funds ever for the reason that trade was based in 2019.
“He had wealth, he had energy, he had affect. However all of that, all of it, was constructed on lies,” Rehn mentioned. “The cash he was spending to construct his empire, it was cash he was stealing from FTX’s prospects.”
DEFENCE PORTRAYS BANKMAN-FRIED AS IN OVER HIS HEAD
Mark Cohen, Bankman-Fried’s lawyer, described the FTX founder as an formidable and generally careless entrepreneur who “ignored” threat administration however by no means meant to defraud anybody.
“Sam and his colleagues have been constructing the aircraft as they have been flying it,” Cohen mentioned in his opening assertion on Wednesday.
BANKMAN-FRIED WAS CONCERNED MONTHS BEFORE EXCHANGE COLLAPSED: EX-FTX EMPLOYEE
Adam Yedidia, a school pal of Bankman-Fried’s who later labored for him at FTX, mentioned Bankman-Fried advised him in the summertime of 2022 that he was apprehensive Alameda’s money owed to FTX have been too huge.
“The dialog started with me citing the big debt owed by Alameda to FTX and asking one thing like, ‘are issues OK?'” Yedidia testified. “Sam mentioned one thing like, ‘we have been bulletproof final 12 months however we’re not bulletproof this 12 months.'”
A VENTURE CAPITALIST SAYS FTX DID NOT TELL HIM ABOUT ALAMEDA TIES
Matt Huang, the top of crypto-focused enterprise capital agency Paradigm, testified on Thursday that Bankman-Fried didn’t inform him that FTX commingled its funds with Alameda earlier than Paradigm determined to speculate $278 million within the trade.
The agency has now written the worth of that funding all the way down to zero, Huang mentioned.
EX-FTX EXEC SAYS HE COMMITTED CRIMES WITH BANKMAN-FRIED
Gary Huang, a former member of Bankman-Fried’s interior circle who has pleaded responsible and agreed to testify towards him, took the stand on Thursday and mentioned he dedicated monetary crimes with Bankman-Fried, who he mentioned advised him to tweak FTX’s software program code to permit Alameda to withdraw limitless funds.
“We lied about this to the general public,” Wang mentioned.