Indicted FTX founder Sam Bankman-Fried arrives on the U.S. Courthouse in New York Metropolis, July 26, 2023.
Amr Alfiky | Reuters
Twelve jurors in a decrease Manhattan courtroom have begun to deliberate the destiny of FTX founder Sam Bankman-Fried following a month of testimony from almost 20 witnesses.
The case was handed to the jury round 3:15 p.m. on Thursday, after U.S. District Choose Lewis Kaplan completed studying aloud 60 pages value of directions. A verdict may come as early as Thursday afternoon, and Choose Kaplan beforehand ordered the jury to remain till 8:15 p.m, providing free pizza and Uber rides residence.
Bankman-Fried, who began digital asset trade FTX in 2019, and sister hedge fund Alameda Analysis two years earlier, is charged with seven counts, together with wire fraud, securities fraud and cash laundering, associated to the implosion of his crypto empire late final 12 months.
He faces greater than 100 years in jail if convicted. The 31-year-old graduate of Massachusetts Institute of Expertise and son of two Stanford authorized students has pleaded not responsible to all expenses.
To ensure that Bankman-Fried to be discovered responsible, the jury should unanimously resolve past an inexpensive doubt that the entrepreneur, as soon as hailed as a crypto genius, meant to defraud traders and prospects.
The trial, initially anticipated to run till the Thanksgiving vacation, has moved swiftly. The federal government curtailed its witness record, and finally did not carry a rebuttal case after the protection rested. The protection known as solely three witnesses to the stand, with the majority of its argument counting on the sworn testimony of the defendant.
Each side have additionally moved extra shortly than anticipated on direct and cross-examinations.
Choose Kaplan has inspired the expedited timeline, holding jurors till 6:30 p.m. on Wednesday in an effort to end closing arguments. It is unclear how lengthy the jury will deliberate, however the decide — whereas emphasizing that he isn’t speeding a choice — mentioned he is prepared to remain till 8:15 p.m. Thursday and informed jurors the federal government would cowl dinner and certain pay for his or her journey residence.
Jurors take heed to testimony throughout the fraud trial of Sam Bankman-Fried over the collapse of FTX, the bankrupt cryptocurrency trade, at Federal Courtroom in New York Metropolis, U.S., October 6, 2023 on this courtroom sketch.
Jane Rosenberg | Reuters
Mark Cohen, Bankman-Fried’s protection lawyer, made his ultimate plea for his shopper on Wednesday, arguing that the defendant ought to be discovered not responsible on all counts, partially as a result of the FTX founder had acted in good religion and with out prison intent, believing the whole lot would work out.
“Each film wants a villain,” Cohen mentioned of the prosecution’s case in opposition to Bankman-Fried, including that the federal government had incorrectly portrayed him as a “monster,” a “dangerous man,” and a “prison mastermind.”
Cohen claimed the case in opposition to his shopper was constructed on the false premise that FTX was a fraudulent enterprise established to deliberately steal buyer funds from its “very earliest days.”
Whereas FTX’s lack of a danger administration system or chief danger officer mirrored poor system controls, dangerous enterprise selections aren’t crimes, Cohen mentioned.
Cohen informed the jury that if any members of Bankman-Fried’s interior circle actually thought one thing nefarious was taking place, that they had choices, together with resigning, leaving the Bahamas or “blowing the whistle.” None of them did, he mentioned.
‘Meant to scale back his function’
The protection’s chief witness was Bankman-Fried himself, and most of his testimony amounted to a distraction, Renato Mariotti, a former prosecutor within the U.S. Justice Division’s Securities and Commodities Fraud Part, informed CNBC earlier this week. For example, he cited Bankman-Fried’s blaming of Caroline Ellison, his ex-girlfriend and former head of Alameda, for failing to correctly hedge.
His testimony was “meant to scale back his function, like his frequent reminders that others had been concerned, that he had quite a bit on his plate, that he was younger, or that he wasn’t a programmer,” mentioned Mariotti, who’s now a trial associate in Chicago with Bryan Cave Leighton Paisner.
Caroline Ellison, former chief government officer of Alameda Analysis LLC, leaves Manhattan Federal Courtroom after testifying throughout the trial of FTX CEO Sam Bankman-Fried, on October 10, 2023 in New York Metropolis.
Michael M. Santiago | Getty Photos
Throughout the federal government’s closing arguments, prosecutors reminded jurors of the mountain of proof key witnesses had supplied.
“The defendant schemed and lied to get cash, which he spent,” Assistant U.S. Legal professional Nicolas Roos informed the court docket.
Roos mentioned there’s “no critical dispute” that $10 billion in buyer cash that was sitting in FTX’s crypto trade went lacking, with a few of it going to pay for actual property, investments, mortgage repayments and political donations.
“A pyramid of deceit was constructed by the defendant,” Roos mentioned. “That finally collapsed.”
Essential to the failure of FTX was the usage of buyer funds to cowl losses in Alameda’s books following the plunge in crypto costs final 12 months. Roos mentioned Bankman-Fried is the one who gave particular privileges to Alameda, permitting the hedge fund to siphon buyer cash. He knew it was unsuitable, Roos mentioned, which is why he stored it secretive.
Roos introduced up testimony from three firsthand witnesses who mentioned that they’d spoken with Bankman-Fried concerning the chief subject — an enormous gap within the stability sheet.
Bankman-Fried “had the vanity to suppose he may get away with it,” Roos mentioned.
Bankman-Fried knew Alameda had a unfavourable internet asset worth of $2.7 billion, Roos mentioned, however wished to make one other $3 billion in enterprise investments. The one method to do this was with FTX buyer funds, he mentioned.
Moreover, Roos informed the jury, shopper cash went to $100 million in actual property bills, together with a $30 million penthouse within the Bahamas and $16 million for his dad and mom’ residence.
In referencing the Tremendous Bowl image with Katy Perry and others, Roos known as Bankman-Fried a “celeb chaser.”
In closing, the prosecution reminded the court docket that Bankman-Fried directed losses to be shifted to Alameda and that FTX’s insurance coverage fund had made up numbers. Add all of it up, Roos mentioned, and it debunks the protection’s primary argument that Bankman-Fried acted in good religion and believed the whole lot would work out.
“This was a fraud that occurred on a large scale,” he mentioned.
WATCH: Sam Bankman-Fried set to testify
