Sam Bankman Fried, the onetime cryptocurrency magnate, constructed his FTX crypto alternate right into a “pyramid of deceit” resting on a “foundation of lies and false promises,” a federal prosecutor mentioned on Wednesday on the prison fraud trial.
Mr. Bankman-Fried’s attorney countered that his 31-year-old shopper was once merely a “math nerd” who can have made some unhealthy industry selections, however had dedicated no crimes and not instructed someone to wreck the legislation.
Those divergent messages shaped the core of the last arguments in Mr. Bankman-Fried’s trial on Wednesday in a Manhattan court. Nicolas Roos, the prosecutor, started by means of announcing that Mr. Bankman-Fried was once a liar who was once liable for FTX’s cave in remaining yr, which had left consumers not able to recuperate their deposits.
Mr. Bankman-Fried, who had testified all through the trial in his personal protection, had “lied about big things and small things,” Mr. Roos mentioned, declaring that the defendant mentioned he “couldn’t recall” greater than 140 instances in keeping with questions about cross-examination.
Then Mark Cohen, a attorney for Mr. Bankman-Fried, mentioned in his last argument that the FTX founder had acted in excellent religion. “Time and again, the prosecution has sought to turn Sam into some sort of villain, some sort of monster,” he mentioned.
Their dueling ultimate arguments got here after 15 days of testimony in Mr. Bankman-Fried’s trial, which is among the maximum high-profile monetary crime instances in years and has moved way more speedily than expected. The end result of the case will likely be observed as a referendum no longer simplest at the fast upward thrust and fall of Mr. Bankman-Fried’s industry empire, which at its height was once valued at $32 billion, but additionally at the risky crypto trade, which simplest two years in the past was once using excessive sooner than melting down remaining yr.
The impressive implosion of FTX remaining November activate a sequence response that resulted in the cave in of alternative crypto corporations. Mr. Bankman-Fried’s arrest and next fees additionally activate regulatory crackdowns around the crypto universe.
At the guts of Mr. Bankman-Fried’s case is whether or not he dedicated fraud and handled FTX as his private piggy financial institution. Prosecutors contend that he stole as a lot as $10 billion from FTX’s consumers to pay for investments in different crypto corporations, purchase lavish real-estate within the Bahamas, the place the alternate was once headquartered, and prop up a crypto buying and selling company he additionally based, Alameda Research.
Mr. Bankman-Fried has pleaded no longer in charge to seven counts of fraud, conspiracy and cash laundering. If convicted, he may just face what quantities to a lifestyles sentence.
Carl Tobias, a professor on the University of Richmond School of Law, mentioned the prosecution offered a robust case and made a smart move in “framing this matter as a garden-variety fraud case, rather than a more complex cryptocurrency case.”
Mr. Bankman-Fried’s trial, which started on Oct. 4, has featured a variety of destructive testimony. Prosecutors known as 16 witnesses, together with 3 of Mr. Bankman-Fried’s former most sensible lieutenants, every of whom had pleaded in charge to fraud and conspiracy fees and agreed to testify towards their former boss. The protection, for its section, known as simply 3 witnesses, one in every of whom was once Mr. Bankman-Fried.
At the trial, the prosecution’s 3 famous person witnesses — Caroline Ellison, Nishad Singh and Gary Wang, who all labored with Mr. Bankman-Fried — testified that the FTX founder knew for lots of months that his spending spree was once unsustainable and improperly fueled by means of FTX’s buyer cash that have been transferred to Alameda. They additionally mentioned Mr. Bankman-Fried knew Alameda may just no longer pay again the billions that it had misappropriated from FTX, with Alameda’s debt to FTX hid from consumers and traders.
In reaction, Mr. Bankman-Fried and his legal professionals argued that he was once unaware till only some weeks sooner than FTX collapsed that billions in buyer cash have been misused. Mr. Bankman-Fried testified that he had idea Alameda’s spending got here from company cash, no longer buyer cash. Any errors that have been made, Mr. Bankman-Fried mentioned, have been made in excellent religion and no longer meant to defraud someone.
FTX was once intended to “move the ecosystem forward,” he testified at one level. “It turned out the opposite of that.”
For last arguments on Wednesday, Damian Williams, the highest federal prosecutor in New York, sat within the entrance row of the court, accompanied by means of different executive officers. Mr. Bankman-Fried’s oldsters, who’ve been fixtures within the gallery all the way through the trial, skipped the federal government’s presentation however returned to the court to look Mr. Cohen shield their son. Mr. Bankman-Fried sat between his legal professionals, dressed in the similar grey swimsuit and pink tie he wore at the stand in contemporary days.
Standing on the lectern, Mr. Roos went over the highlights of the testimony from the prosecution witnesses, together with their statements that Alameda had particular privileges with FTX, such as a $65 billion line of credit that authorised the buying and selling company to borrow billions from FTX’s consumers. Mr. Bankman-Fried stored the ones particular privileges secret, Mr. Roos mentioned, “because he knew they were wrong.”
The prosecutor additionally went over the inconsistencies in Mr. Bankman-Fried’s testimony with the ones of his former workers. He displayed charts with headings like “The defendant’s lies to the public” and “The defendant’s false tweets in November.” He offered virtual information that confirmed Mr. Bankman-Fried had checked out incriminating paperwork that he mentioned he couldn’t recall having observed.
Mr. Roos additionally identified cases the place Mr. Bankman-Fried seemed to intentionally use FTX’s buyer deposits, together with to shop for again FTX fairness from Binance, a competing crypto alternate.
Mr. Cohen started his last argument by means of announcing prosecutors went out in their method to concentrate on Mr. Bankman-Fried’s look. “We’ll agree there was a time when Sam was probably the worst dressed C.E.O. and had the worst haircut,” Mr. Cohen mentioned, including that the ones weren’t crimes.
The prosecution’s retelling of FTX’s cave in was once exaggerated and cinematic, Mr. Cohen mentioned. “In the real world, unlike the movie world, things can get messy,” he mentioned, including that the large spending by means of FTX and Alameda “were reasonable corporate expenses” and no longer a misuse of purchaser cash.
Mr. Bankman-Fried acted in excellent religion together with his industry selections and lacked the prison intent to defraud someone, Mr. Cohen mentioned. It was once the prosecution’s burden to end up guilt past a cheap doubt, he added, and Mr. Bankman-Fried was once no longer obligated to end up anything else.
Mr. Bankman-Fried testified “because he wanted to tell you what happened,” Mr. Cohen mentioned. “It is hard to think of a more stressful situation than that. He was far from polished. He was himself, he was Sam. He told you when he didn’t remember things.”
Mr. Cohen additionally attempted to discredit Ms. Ellison, Mr. Wang and Mr. Singh. He displayed a chart appearing that every of them may just face a long time in jail, and argued that they have been appearing out of self-preservation by means of cooperating with prosecutors.
As he completed his presentation, Mr. Cohen implored the jury to stay an open thoughts. He emphasised how temporarily Mr. Bankman-Fried’s lifestyles had modified — a school scholar at some point, a crypto magnate the following and now a defendant at a federal fraud trial.
As Mr. Cohen completed, Mr. Bankman-Fried seemed with regards to tears. He blinked temporarily, glancing backward and forward from the lectern to his oldsters within the gallery. One of his legal professionals put an arm round him, sooner than a couple of U.S. marshals led him out of the room.
On Thursday, the jury of 9 girls and 3 males is anticipated to start deliberating on a verdict after Judge Lewis A. Kaplan of U.S. District Court instructs them at the related legislation.