Jury members have begun their discussions in the criminal fraud case against Sam Bankman-Fried. The 12 people in the jury box will determine if the FTX leader is responsible for the seven criminal charges, which include wire fraud, securities fraud, and money laundering, in association to the collapse of his cryptocurrency business. Having entered a not guilty plea for each count, Bankman-Fried could face more than a century in jail if found guilty.
The jury in a lower Manhattan courtroom have begun to make their decision about FTX founder Sam Bankman-Fried after hearing testimony from about twenty witnesses during the course of a month. Judge Kaplan gave the jury their instructions, about sixty pages long, around 3:15 p.m. on Thursday and a verdict may come during the day. The defendant, who established the digital asset exchange FTX in 2019 and Alameda Research just two years beforehand, is charged with seven counts, including wire fraud, securities fraud and money laundering, concerning the failure of his crypto venture later in the year. If he is convicted, Bankman-Fried is liable to a sentence of more than one hundred years in prison. Despite this, the 31-year-old MIT graduate and child of two Stanford legal experts has pleaded not guilty.
In order for the court to find Bankman-Fried guilty, the jury must come to a unanimous agreement beyond a reasonable doubt that he was intending to deceive his investors and customers. Even though the trial was originally intended to finish before the Thanksgiving holiday, it has been going smoother than anticipated with the government shortening their list of witnesses and no longer calling witnesses to the stand after the defense rested. The defense directed only three witnesses to appear, basing much of their argument on the testimony of Bankman-Fried himself. Both sides have also moved through direct and cross-examinations quickly.
Judge Kaplan has been pushing for a speedy trial, holding the jury until 6:30 p.m. on Wednesday to close the arguments. He has made it clear that he isn't rushing the jury, but is ready to stay until 8:15 p.m. on Thursday in case they need more time, and informed the jury that the government would provide dinner and possibly pay for their rides home.
On Wednesday, Mark Cohen, Bankman-Fried's defense attorney, presented his closing plea that his client should be acquitted of all charges. He asserted that the FTX founder had trusted that everything would turn out and had not acted criminally. Cohen suggested that the prosecution had wrongly portrayed Bankman-Fried as a "monster," a "bad guy," and a "criminal mastermind." The defense lawyer took issue with the claim that FTX had been designed from the outset to scam customers, citing the lack of a risk management system or chief risk officer as a result of insufficient system controls. He pointed out that Bankman-Fried's team had not done anything to alert authorities and could have chosen to leave the Bahamas or blow the whistle if they had believed something illegal was taking place.
Bankman-Fried was the defense's chief witness, but his testimony was essentially an attempt to deflect blame, according to Renato Mariotti, former prosecutor in the U.S. Justice Department's Securities and Commodities Fraud Section. Mariotti, now a trial partner in Chicago with Bryan Cave Leighton Paisner, gave CNBC an example of this—Bankman-Fried's pointing of the finger at Caroline Ellison, his ex-girlfriend and former head of Alameda, for not hedging correctly. Mariotti commented that Bankman-Fried “frequently reminded” parties that he was young, not a programmer, and had other obligations, all of which was meant to minimize his responsibility. in FTX fraud trial
During the government's concluding remarks, prosecutors reminded jurors of the wealth of evidence presented by key witnesses. Nicolas Roos, an Assistant U.S. Attorney, told the court that there was "no serious dispute" that $10 billion in customer funds that was stored in FTX's crypto exchange had gone missing. Some of that money was reportedly used to pay for real estate, investments, loan repayments, and political contributions. Roos referred to the scheme as a "pyramid of deceit" that had finally collapsed.
The prosecution demonstrated how Bankman-Fried had enabled Alameda to misappropriate customer money by granting it special privileges. Witnesses had reportedly discussed with Bankman-Fried the major issue of the imbalance in the balance sheet. Roos described Bankman-Fried's alleged offense as one that "had the arrogance to think he could get away with it." It was also stated that Bankman-Fried had sought to make an additional $3 billion in venture investments with customer funds. Furthermore, Roos mentioned that client money had been allocated to a $30 million penthouse in the Bahamas and $16 million for his parents' residence. Roos also called Bankman-Fried a "celebrity chaser" in reference to the Super Bowl picture featuring Katy Perry and others.
In his closing, Roos stated that Bankman-Fried had instructed losses to be shifted to Alameda and that FTX's insurance fund had produced false figures. He concluded that the defense's main argument that Bankman-Fried had acted in good faith was debunked when all the evidence was considered. Roos ended with the declaration that "this was a fraud that occurred on a massive scale."
Comments