Sam Bankman-Fried Convicted of Defrauding Customers in FTX Trial

Key Moments from the Trial

Sam Bankman-Fried, the former CEO of the now-defunct cryptocurrency exchange FTX, has been found guilty of defrauding customers. Let’s take a closer look at some key moments from the trial.

‘Building the Plane as They Were Flying’

During opening statements, Bankman-Fried’s attorney, Mark Cohen, described FTX as a fledgling company that faced negative publicity and challenges in the cryptocurrency market. “Sam and his colleagues were building the plane as they were flying it,” Cohen said.

Caroline Ellison Lived in ‘Dread’

Caroline Ellison, the former CEO of Bankman-Fried’s crypto hedge fund, Alameda Research, testified that she knew about Alameda’s borrowing of billions of dollars from FTX. This left the exchange vulnerable if customers sought to withdraw their funds. Ellison said she lived in constant “dread,” and the collapse of FTX last November came as a “relief” to her. “I felt a sense of relief that I didn’t have to lie anymore,” she tearfully stated.

‘We Lied’ to the Public

Gary Wang, Bankman-Fried’s college roommate and ex-colleague, revealed during his testimony that Alameda Research had been given special trading privileges on FTX. Wang admitted, “We gave special privileges to Alameda Research on FTX, which allowed it to withdraw unlimited amounts of funds from the platform, and we lied about this to the public.”

‘A Lot of People Got Hurt’

Bankman-Fried acknowledged on the stand that the outcome of FTX was far from what he had hoped for. “We thought that we might be able to build the best product on the market,” he stated. “It turned out basically the opposite of that. A lot of people got hurt.”

$8 Billion Debt ‘Surprised’ Bankman-Fried

Bankman-Fried admitted to being “very surprised” when he discovered that Alameda Research had borrowed $8 billion from FTX customer deposits. He also revealed that the loan was not recorded on Alameda’s main account. However, he believed that the hedge fund had sufficient assets to repay the debt. “If it were far larger, I would have been calling a crisis,” he explained.

Bankman-Fried’s Fate Rests with Former Friends

In his closing arguments, Prosecutor Nicolas Roos urged the jurors to consider the testimonies of Caroline Ellison, Gary Wang, and Nishad Singh. All three were once part of Bankman-Fried’s inner circle but became cooperating witnesses in the case. Roos emphasized, “If you believe even one of those witnesses is telling the truth about this, the defendant is guilty.”

It remains to be seen what the final verdict will be in this high-profile trial. The outcome will undoubtedly have significant implications for the cryptocurrency industry and its regulation moving forward.