2023-10-18 10:34:13
Published on Oct 18, 2023 at 12:34 p.m.
The long-awaited trial of the former boss of FTX began on October 3 and is already allowing observers to better understand the resounding bankruptcy of the former cryptocurrency exchange platform. It also offers an anthology of revelations, both on the private and professional life, of the man behind the biggest scandal in the history of the sector. We have selected for you the three essential pieces of information from these first two weeks of hearings rich in testimony.
1. Abandoned by loved ones
Sam Bankman-Fried (SBF) has pleaded not guilty to all charges (two of fraud and five of conspiracy) brought once morest him in connection with the resounding bankruptcy of FTX, a cryptocurrency exchange platform he was co-founded in 2019 with Gary Wang. This is not the case for his former colleagues, the former SBF close guard, who all pleaded guilty and agreed to cooperate with the authorities in order to reduce their sentence. Among the most notable are: Caroline Ellison, former CEO of FTX-affiliated trading firm Alameda Research and incidentally SBF girlfriend; FTX CTO Nishad Singh; as well as Gary Wang, childhood friend and fellow student (at MIT) of SBF.
Their testimonies overwhelmed the accused. “He ordered me to commit these crimes”, Caroline Ellison responded in particular to the question of who was responsible for the loss of several billion dollars of FTX. Money that had been deposited by customers on the platform. Same story with Gary Wang, when the prosecutor questioned him regarding the investments of several hundred million made in various companies in the name of FTX, once more with user funds: “All this was done by SBF”he replied.
2. SBF’s laborious defense
Sam Bankman-Fried, who faces up to 115 years in prison, has very little room to maneuver regarding his defense. The angle of attack of his lead lawyer, Mark Cohen, is to convince the jurors that his client certainly made mistakes, but did not steal from anyone. An arduous task in view of the elements provided by the other witnesses and the detestable image from which SBF now suffers.
In his introductory speech, Mark Cohen tried to describe SBF as a business whiz, who was only doing what was allowed in a sector that the government barely understands. “Sam didn’t rob anyone and didn’t intend to rob anyone.”, said the lawyer. SBF allegedly mixed FTX client deposits through Alameda Research? This did not matter, because he remained the majority owner of both companies, and might therefore dispose of them as he wished, according to Mark Cohen, who described Alameda as a “market-maker” (a “market maker” in French). , or an operator supposed – in particular – to ensure liquidity on a market.
SBF’s defense also attempts to argue that Caroline Ellison is more responsible for the collapse of FTX last November than her own client. Mark Cohen in fact accused the latter of having been incapable of putting in place appropriate hedges once morest Alameda’s bad investments, even though SBF had expressly asked it to do so. After questioning Caroline Ellison for almost five hours, Mark Cohen was however unable to demonstrate this. And according to former federal prosecutors interviewed by the Washington PostSBF’s chances of getting rid of the criminal fraud charges it faces are rapidly deteriorating.
3. The most improbable revelations
These first two weeks of the trial (it began on October 3) offered observers an anthology of absurd revelations, relating to both the professional and private life of the founder of FTX.
Caroline Ellison thus revealed that the latter had informed her of his ambition to become President of the United States, a hypothesis for which he estimated the probability at 5%, as well as his intention to give 5 billion dollars to Donald Trump so that he -he renounces running in the 2024 presidential election.
We also learned, randomly, that American football superstar Tom Brady had been paid 55 million for a week of promoting the platform, that SBF had given 10 million to Joe Biden, because he thought that “would open doors for him”and that he also tried to sell shares of FTX to the Saudi crown prince, Mohammed bin Salman.
If SBF is not accused of corruption, Caroline Ellison was also authorized to testify on a case in which he allegedly transferred “around $100 million” on cryptocurrency wallets belonging to Chinese officials. A bribe supposed to encourage local authorities to unblock two accounts belonging to FTX on the Huobi (now HTX) and OKX platforms, worth a total of one billion dollars, frozen as part of an investigation into money laundering targeting an Alameda counterparty. She described this payment as “a last resort” following other schemes failed, one of which involved using accounts belonging to “Thai prostitutes” in order to set up transactions to transfer the value of blocked accounts to those of sex workers.
We still don’t know if SBF will testify during the trial. His lawyers said their client, who suffers from attention deficit hyperactivity disorder, requires a higher dose of Adderall (amphetamine) than he receives each morning in prison to participate fully in his defense and decide whether or not to testify.
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