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 practically 20 witnesses.
The case was handed to the jury round 3:15 p.m. on Thursday, after U.S. District Decide Lewis Kaplan completed studying aloud 60 pages price of directions. A verdict may come as early as Thursday afternoon, and Decide Kaplan beforehand ordered the jury to remain till 8:15 p.m, providing free pizza and Uber rides house.
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 yr.
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 costs.
To ensure that Bankman-Fried to be discovered responsible, the jury should unanimously determine past an inexpensive doubt that the entrepreneur, as soon as hailed as a crypto genius, meant to defraud buyers and clients.
The trial, initially anticipated to run till the Thanksgiving vacation, has moved swiftly. The federal government curtailed its witness record, and in the end did not convey 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.
Either side have additionally moved extra rapidly than anticipated on direct and cross-examinations.
Decide Kaplan has inspired the expedited timeline, holding jurors till 6:30 p.m. on Wednesday as a way to end closing arguments. It is unclear how lengthy the jury will deliberate, however the choose — whereas emphasizing that he is not speeding a choice — mentioned he is prepared to remain till 8:15 p.m. Thursday and advised jurors the federal government would cowl dinner and certain pay for his or her trip house.
Jurors take heed to testimony throughout the fraud trial of Sam Bankman-Fried over the collapse of FTX, the bankrupt cryptocurrency trade, at Federal Court docket in New York Metropolis, U.S., October 6, 2023 on this courtroom sketch.
Jane Rosenberg | Reuters
Mark Cohen, Bankman-Fried’s protection legal professional, made his last plea for his shopper on Wednesday, arguing that the defendant must 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 “unhealthy 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 threat administration system or chief threat officer mirrored poor system controls, unhealthy enterprise choices aren’t crimes, Cohen mentioned.
Cohen advised the jury that if any members of Bankman-Fried’s inside circle really thought one thing nefarious was occurring, they’d choices, together with resigning, leaving the Bahamas or “blowing the whistle.” None of them did, he mentioned.
‘Meant to cut 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, advised 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 cut back his function, like his frequent reminders that others had been concerned, that he had loads on his plate, that he was younger, or that he wasn’t a programmer,” mentioned Mariotti, who’s now a trial accomplice in Chicago with Bryan Cave Leighton Paisner.
Caroline Ellison, former chief government officer of Alameda Analysis LLC, leaves Manhattan Federal Court docket 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 offered.
“The defendant schemed and lied to get cash, which he spent,” Assistant U.S. Lawyer Nicolas Roos advised 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 in the end collapsed.”
Essential to the failure of FTX was using buyer funds to cowl losses in Alameda’s books following the plunge in crypto costs final yr. 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 mistaken, 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 problem — an enormous gap within the steadiness sheet.
Bankman-Fried “had the conceitedness to assume 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 needed to make one other $3 billion in enterprise investments. The one method to try this was with FTX buyer funds, he mentioned.
Moreover, Roos advised 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’ house.
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 predominant 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
