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Sam Bankman-Fried, the former CEO of collapsed crypto alternate FTX, stays on trial for alleged fraud and conspiracy as he led the corporate’s swift rise and implosion. We’re now in the course of the path’s second week, with among the highest-profile witnesses offering their testimony on SBF’s conduct, FTX’s enterprise practices and alleged cash laundering.
Thus far within the second week, the standout testimony has come 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 below the instruction of SBF. And although there aren’t any expenses 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.
Our resident crypto skilled Jacquelyn Melinek, our skilled on all issues crypto, painted a full image of the testimony as she continues to cowl the trial from inside the courtroom, because the highest-profile legal case tied to the trade marches on inside the Manhattan Federal Court docket. Between stints within the locked-down courtroom, she’ll be posting to X, as properly.
For these in want of a 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 on top of things. Or when you’re right into a deeper dive into week one particularly, you may learn extra evaluation right here.
You may as well observe alongside along with her and the starcrypto workforce’s protection within the Chain Response e-newsletter, which drops Thursdays at 12 pm PT, and the Chain Response podcast, which is able to hit your feed each Thursday.
Learn how to observe the SBF trial
The trial itself is anticipated to final at the least six weeks, kicking off with jury choice on Tuesday, October 3. From there, entry to the proceedings is proscribed, as no gadgets are allowed; stories are being bodily put collectively inside the courtroom.
Past our every day protection, extra experience and commentary will stay on starcrypto+. There, you will discover tales like this in-depth breakdown of what to anticipate from each side of the SBF case, the place the prosecution and protection may achieve floor or fall quick of their arguments and what the takeaways have been from the opening arguments.
SBF trial: What we realized within the first week
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 indicate 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 bizarre clients, too. He purchased himself wealth, energy and affect.”
The protection, alternatively, 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 aircraft as they have been flying it,” protection legal professional Mark Cohen mentioned. “That they had to determine tips on how to navigate a world the place they have been operating FTX, constructing out its programs, coping with hacking threats, managing the credit score threat of their clients, managing lots of of staff, 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 line with Wang, pulled funding instantly from FTX clients, whose transactions can be funneled towards Alameda after which directed elsewhere.
Verify right here for our rundown of Wang’s testimony thus far, ensuing from a responsible plea in December 2022. Wang’s testimony is ready to conclude on Friday.
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 observe that Huang says would have halted his involvement. The complete breakdown of his testimony on his relationship with FTX, stretching again to 2019, will be discovered proper right here.
We additionally obtained a have a look at the composition of the SBF trial’s jury, which ranges from a practice conductor to a retired funding banker who attended Stanford College. You possibly can 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 court docket.
Earlier within the week, we obtained affirmation that at no level did the U.S. authorities supply SBF a plea supply.
For a full rundown of our protection of the SBF trial, test beneath: