Here Are the Key Takeaways From Sam Bankman-Fried Trial’s Opening Statements

Here are the key takeaways from the opening statements in Sam Bankman-Fried’s trial over the collapse of FTX on Wednesday.

(Bloomberg) — Here are the key takeaways from the opening statements in Sam Bankman-Fried’s trial over the collapse of FTX on Wednesday.

Prosecutors leaned heavily into their allegations that Bankman-Fried knowingly committed fraud and deceived customers about the safety of their funds, taking billions of dollars from thousands of victims. They claim that Bankman-Fried took money whenever he wanted in order to fund a lavish lifestyle that included hangouts with celebrities and massive luxury real estate purchases. “He had wealth, he had power, he had influence, but all of that was built on lies,” Assistant US Attorney Nathan Rehn said.
The prosecution also emphasized the amount of evidence they have at hand, pointing to the planned testimony of Bankman-Fried’s ex-girlfriend Caroline Ellison, who was the CEO of Alameda Research. They noted that Bankman-Fried’s own words will be used against him as well, mentioning tweets he tried to delete and congressional testimony that they say is false.
Bankman-Fried’s defense team played up the volatility of the crypto market and how it could quickly overwhelm growing companies like FTX. His lawyer, Mark Cohen, said that Bankman-Fried encountered a “perfect storm” as lenders recalled loans to Alameda during the steep crypto market downturn last year.
Cohen pinned blame on Ellison, noting that Bankman-Fried advised her to hedge Alameda’s crypto bets, but that she didn’t listen. He said that Bankman-Fried followed business practices that would’ve been considered “reasonable” at the time and that this was a “hindsight case.” He said Bankman-Fried did not intend to harm anyone.
However, Cohen did acknowledge that Alameda had certain privileges in its relationship with FTX, even though both Bankman-Fried and Ellison previously stated that the two companies were completely separate and that Alameda did not get special treatment. He said that the computer code that prosecutors say allowed Alameda to withdraw as much FTX customer money as it wanted was simply put in to allow the firm to function properly.

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