The trial of Bankman-Fried, the previous CEO and co-founder of collapsed crypto trade FTX, is coming into its subsequent chapter as proceedings resume Thursday. As confirmed throughout a teleconference Wednesday, SBF can be taking the stand, together with a handful of different witnesses because the onus shifts towards the protection after the prosecution introduced its case to its conclusion.
As former federal prosecutor Josh Naftalis advised crypto-news, SBF taking to the stand in his personal trial is a “Hail Mary” forward of a verdict and potential sentencing for seven counts tied to fraud and cash laundering.
“As soon as it goes to cross[-examination], he doesn’t get to say, ‘I’m achieved,’” Naftalis mentioned. “He can’t simply stroll out if he doesn’t like the way it’s going.”
Naftalis spoke at size about what comes subsequent within the trial, and addressed widespread misconceptions concerning the prosecution and protection within the newest episode of crypto-news’s Chain Response podcast, which you’ll hearken to under, Apple Podcasts or Spotify.
The SBF trial is without doubt one of the greatest circumstances of its form inside the crypto area. Our resident crypto skilled Jacquelyn Melinek has been on the bottom on the trial because it began, and continues to cowl the ins and outs of the proceedings. However the trial has been on pause from October 20 to right now, so there’s lots to compensate for in the event you want a refresher forward of it coming into its closing few phases.
For these in want of a complete refresher on the case, her breakdown of how FTX went from the third-largest crypto trade valued at a peak of $32 billion to chapter will get you on top of things.
You can even comply with alongside along with her and the crypto-news crew’s protection within the Chain Response publication, which drops Thursdays at 12 pm PT, and the Chain Response podcast, which can hit your feed each Thursday.
The right way to comply with the SBF trial
The trial kicked off with jury choice October 3. From there, entry to the proceedings is proscribed, as no units are allowed; experiences are being bodily put collectively inside the courtroom (or despatched to overflow rooms).
Past our day by day protection, further experience and commentary will stay on crypto-news+. There, you will discover tales like this in-depth breakdown of what to anticipate from either side of the SBF case, the place the prosecution and protection may achieve floor or fall quick of their arguments and what the takeaways had been from the opening arguments.
SBF trial: What we discovered in week three
The third week of the trial featured a few noteworthy moments for the prosecution, together with FTX’s former basic counsel Can Solar. He, like lots of SBF’s former colleagues, opted to cooperate with authorities and testified that SBF requested him to create a theoretical “authorized justification” for using billions in client funds simply days earlier than FTX filed for chapter.
Robert Roroujerdi, managing director of the hedge fund Third Level, testified about his expertise working with SBF and FTX, in a partnership that in the end resulted in a $60 million funding and a lack of know-how concerning the particular relationship between Alameda Analysis and FTX. Had he identified of such a relationship, he testified that Third Level wouldn’t have invested in FTX within the first place.
And earlier within the week, a College of Notre Dame professor who helped the federal government prosecution of Enron and WorldCom, Peter Easton, testified about what he uncovered after tracing the circulate of billions of {dollars} between Alameda Analysis and FTX. A lot of mentioned funding got here from clients, and Easton testified that he discovered that person deposits had been utilized by each FTX and Alameda to buy actual property, make investments or direct funding towards political causes and charities.
SBF trial: What we discovered in week two
The second week of the trial’s standout testimony got here from Alameda Analysis’s former CEO Caroline Ellison, who claimed she took $14 billion from clients to repay money owed to lenders, utilizing them as a line of credit score beneath the instruction of SBF. Ellison additionally went into element about how a $2 billion enterprise fund, FTX Ventures, was funded by cash that had beforehand been allotted to Alameda from third-party lenders.
And although there aren’t any fees of bribery within the case, Ellison additionally testified to paying Chinese language officers $150 million to revive entry to $1 billion in frozen buying and selling accounts.
SBF trial: What we discovered within the week one
As anticipated, the opening statements within the SBF trial had been spicy. The prosecution painted an image of an empire “constructed on lies” and made a degree to point out precise photos of SBF alongside wealthy and highly effective figures as an instance the height of his energy and affect previous to FTX’s implosion.
“This man stole billions of {dollars} from 1000’s of individuals,” prosecutor Thane Rehn advised the court docket. “He defrauded refined buyers and lenders, and he emptied the accounts of odd clients, too. He purchased himself wealth, energy and affect.”
The protection, however, depicted SBF and his colleagues as in over their heads, with out ill-will as FTX collapsed round them.
“Sam and his colleagues had been constructing the airplane as they had been flying it,” protection legal professional Mark Cohen mentioned. “They’d to determine find out how to navigate a world the place they had been working FTX, constructing out its techniques, coping with hacking threats, managing the credit score danger of their clients, managing a whole bunch of staff, all whereas build up their precise trade.”
Learn a recap of the prosecution and protection’s full arguments right here.
FTX’s co-founder and CTO Gary Wang testified Thursday on the extent to which Alameda Analysis was used for no matter functions he and SBF noticed match. The crypto buying and selling agency, based on Wang, pulled funding straight from FTX clients, whose transactions could be funneled towards Alameda after which directed elsewhere.
Examine right here for our rundown of Wang’s testimony to this point, ensuing from a responsible plea in December 2022.
Thursday additionally introduced in testimony from Matt Huang, co-founder and managing accomplice at crypto funding agency Paradigm. That agency invested $278 million in FTX throughout 2021 and 2022, and is a part of a class-action lawsuit accusing it and others of defrauding clients by selling FTX.
His testimony centered round being left uninformed about FTX’s utilization of buyer cash to maintain the Alameda Analysis afloat, a apply that Huang says would have halted his involvement. The total breakdown of his testimony on his relationship with FTX, stretching again to 2019, could be discovered proper right here.
We additionally bought a have a look at the composition of the SBF trial’s jury, which ranges from a prepare conductor to a retired funding banker who attended Stanford College. You may hearken to a particular joint episode of our podcasts Fairness and Chain Response to get a greater sense of the vibe between the jurors and the remainder of the court docket.
For a full rundown of our protection of the SBF trial, test under:
