SBF Trial: Every thing to know from the FTX courtroom forward of his testimony

The trial of Bankman-Fried, the previous CEO and co-founder of collapsed crypto alternate FTX, is getting into its subsequent chapter as proceedings resume Thursday. As confirmed throughout a teleconference Wednesday, SBF shall 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 instructed starcrypto, 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 finished,’” 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 frequent misconceptions in regards to the prosecution and protection within the newest episode of starcrypto’s Chain Response podcast, which you’ll be able to take heed to beneath, Apple Podcasts or Spotify.

The SBF trial is without doubt one of the largest instances of its form throughout the crypto house. 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 this moment, so there’s lots to compensate for for those who want a refresher forward of it getting into its ultimate few phases.

For these in want of a complete refresher on the case, her breakdown of how FTX went from the third-largest crypto alternate valued at a peak of $32 billion to chapter will get you in control.

You may as well comply with alongside along with her and the starcrypto group’s protection within the Chain Response publication, which drops Thursdays at 12 pm PT, and the Chain Response podcast, which is able to 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; reviews are being bodily put collectively throughout the courtroom (or despatched to overflow rooms). 

Past our every day protection, further experience and commentary will dwell on starcrypto+. There, yow 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 might acquire floor or fall quick of their arguments and what the takeaways have been from the opening arguments.

SBF trial: What we realized 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 a lot 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 finally resulted in a $60 million funding and a lack of knowledge in regards to 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 consumer deposits have 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 realized 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 realized within the week one

As anticipated, the opening statements within the SBF trial have been spicy. The prosecution painted an image of an empire “constructed on lies” and made a degree to point out precise footage of SBF alongside wealthy and highly effective figures for example 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 instructed the courtroom. “He defrauded refined buyers and lenders, and he emptied the accounts of extraordinary clients, too. He purchased himself wealth, energy and affect.”

The protection, then again, depicted SBF and his colleagues as in over their heads, with out ill-will as FTX collapsed round them.

“Sam and his colleagues have been constructing the airplane as they have been flying it,” protection legal professional Mark Cohen mentioned. “That they had to determine how you can navigate a world the place they have been operating FTX, constructing out its methods, coping with hacking threats, managing the credit score danger of their clients, managing a whole bunch of workers, all whereas build up their precise alternate.”

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, in accordance with Wang, pulled funding immediately from FTX clients, whose transactions could be funneled towards Alameda after which directed elsewhere.

Verify 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 associate 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 follow that Huang says would have halted his involvement. The total breakdown of his testimony on his relationship with FTX, stretching again to 2019, will be discovered proper right here.

We additionally received a take 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 take heed 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 courtroom.

For a full rundown of our protection of the SBF trial, test beneath: