Former staff and pals of Sam Bankman-Fried testified at his trial that he orchestrated a scheme to misappropriate billions of bucks in buyer cash from his FTX cryptocurrency alternate, which collapsed ultimate 12 months.
The witnesses painted a portrait of Mr. Bankman-Fried, 31, as a controlling boss who directed them to dedicate fraud. They stated the FTX founder had recognized for months that the alternate had no manner of paying again no less than $8 billion in buyer cash that used to be used to shop for lavish actual property, make investments in different crypto firms, make marketing campaign contributions, and pay again lenders to a buying and selling company that Mr. Bankman-Fried additionally managed.
Here are highlights of the testimony from a number of prosecution witnesses — together with Mr. Bankman-Fried’s worker and on-again, off-again female friend, Caroline Ellison — who’ve been central to the case:
Adam Yedidia
The first prosecution witness used to be Adam Yedidia, a former FTX developer who used to be an in depth pal of Mr. Bankman-Fried’s and lived with him and different buddies in the Bahamas.
Mr. Yedidia, who has now not been charged with any crimes and testified beneath immunity, stated Mr. Bankman-Fried had recognized that FTX and Alameda Research, a sister crypto buying and selling company, have been on skinny ice.
Mr. Yedidia described a dialog he had with Mr. Bankman-Fried at their paddle tennis court docket the summer time prior to FTX collapsed, because the crypto marketplace crashed and lenders to Alameda have been asking for his or her a reimbursement. Mr. Yedidia stated Mr. Bankman-Fried had informed him that FTX “was bulletproof last year, but we’re not bulletproof this year” and that it will take six months to a few years to make the corporate “bulletproof again.”
Caroline Ellison
Ms. Ellison, who ran Alameda and used to be Mr. Bankman-Fried’s former female friend, used to be the federal government’s big name witness. She detailed the shut dating between Alameda and FTX, together with a number of cases when, she stated, Mr. Bankman-Fried directed or greenlighted the usage of FTX’s buyer deposits.
Ms. Ellison, who has pleaded to blame to fraud fees and is cooperating with prosecutors, stated Mr. Bankman-Fried have been keen to shop for again FTX stocks from Binance, a rival crypto alternate. She used to be worried in regards to the transfer, she stated, as a result of she knew that may imply borrowing $1 billion in FTX buyer budget for the transaction.
“That’s OK, I think this is really important, we have to get it done,” Mr. Bankman-Fried informed Ms. Ellison, in keeping with her testimony.
Ms. Ellison additionally presented perception into Mr. Bankman-Fried’s state of mind, detailing their dating and his reasonably unconventional view that regulations about now not mendacity and now not stealing have been of lesser significance than movements that he noticed as serving a better just right.
Gary Wang
Mr. Wang, an FTX co-founder who has pleaded to blame in the case and agreed to cooperate with prosecutors, informed the jury that Mr. Bankman-Fried had directed him to incorporate options at the alternate that gave Alameda a bonus at the platform. “In the end, it was Sam’s decision,” he testified.
The soft-spoken coder spent a lot of his time at the stand explaining the intricacies of FTX’s laptop code, which supported prosecutors’ level that Alameda used to be deliberately given particular privileges at the platform so it will use FTX buyer deposits as though they have been a piggy financial institution.
Mr. Wang met Mr. Bankman-Fried in highschool math camp, and so they have been classmates on the Massachusetts Institute of Technology prior to founding FTX in combination in 2019.
Nishad Singh
Mr. Singh, a former FTX government who has additionally pleaded to blame, detailed Mr. Bankman-Fried’s lavish spending, together with giant actual property purchases and political donations. That spending, he stated, used to be bankrolled by means of FTX buyer deposits.
Mr. Singh stated he had given different buddies get entry to to his financial institution accounts to make political donations beneath his title, together with Mr. Bankman-Fried’s more youthful brother, Gabe, who ran the nonprofit workforce Guarding Against Pandemics. At one level, when a credit cord wasn’t going via, Gabe Bankman-Fried despatched one among his assistants to the Bahamas “with a bunch of checks from my bank account,” Mr. Singh testified.
Prosecutors additionally confirmed an e-mail alternate between Mr. Singh and Mr. Bankman-Fried’s mom, Barbara Fried, who used to be receiving $1 million from FTX for her nonprofit Mind the Gap. Ms. Fried, a Stanford legislation professor, steered that Mr. Singh make the donation beneath his title “because we don’t want to create the impression that funding MTG is a family affair, as opposed to a collective effort by many people (including some mystery guy Nishad Singh :)).”
Can Sun
Mr. Sun, a former best FTX legal professional, testified that Mr. Bankman-Fried had driven him to discover a criminal justification for the alternate’s repeated misuse of billions in buyer cash — even after Mr. Sun informed his boss there used to be none.
At Mr. Bankman-Fried’s urging, Mr. Sun stated, he ran via a couple of theoretical choices to justify the borrowing and spending of FTX buyer cash. But Mr. Sun, who testified after securing an settlement that prosecutors would now not pursue fees towards him, stated he had as soon as back informed Mr. Bankman-Fried that none of the ones choices have been supported “by the facts.” Mr. Bankman-Fried answered by means of announcing “something like, ‘Got it,’” Mr. Sun testified.
Prosecutors then performed a clip from an interview that Mr. Bankman-Fried gave ABC’s “Good Morning America” days prior to FTX filed for chapter in November. In that interview, Mr. Bankman-Fried presented up one of the vital theoretical choices that Mr. Sun had supplied him as an reason behind what came about to FTX’s buyer cash.