The first week of the trial of Sam Bankman-Fried, founder of FTX, was marked by tensions and surprising revelations. The US Department of Justice (DOJ) is building a solid case alleging that Bankman-Fried was involved in a scheme to defraud customers and investors through his exchange FTX and hedge fund Alameda Research.
Bankman-Fried’s public image has been dealt a severe blow by documents and allegations from FTX’s current leadership. SBF’s attempted “apology tour” after FTX’s closure didn’t help his defense. Renato Mariotti, an observer of the case, commented that SBF could be a victim of its own success.
Bankman-Fried’s defense, represented by Cohen & Gresser lawyers, did not have an easy week. District Judge Lewis Kaplan was irritated by the interrogation attempts, even rejecting most of the questions asked by defense attorney Chris Everdell.
Gary Wang, co-founder of FTX, admitted in testimony that FTX granted “special privileges” to hedge fund Alameda Research. He also revealed that executives at FTX and Alameda committed various frauds. Additionally, a former FTX developer, Adam Yedidia, mentioned a software bug that overstated Alameda’s holdings by $8 billion.
Outside the courtroom, Bankman-Fried’s biography, written by Michael Lewis, brought to light intriguing details about the cryptocurrency mogul’s trajectory. Revelations about Alameda Research’s fund management and trading strategies were also highlighted.
The week was also marked by information about possible confiscations of Bankman-Fried’s assets, including two luxury jets. Furthermore, Lewis’ biography revealed that SBF changed the lock-up period for SRM tokens after a rally in 2021, out of concern for its employees’ enrichment.
The jury, made up of professionals from different areas, has the difficult task of deciding Bankman-Fried’s fate. Meanwhile, US prosecutors have described SBF’s crypto empire as a “house of cards built on a lie.”
SBF lawyers try to establish that a business error is not necessarily a crime, while the DOJ argues that the lack of clear regulations for cryptocurrencies is not relevant to the case.
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