1 year ago
FTX laminitis Sam Bankman-Fried’s full crypto empire was a “house of cards” that was “built connected a lie,” the U.S. Department of Justice said successful its opening connection astatine the FTX founder's trial.
Bankman-Fried’s defence squad countered that the onetime FTX laminitis acted successful bully religion – adjacent arsenic his businesses grew excessively rapidly and collapsed dramatically done nary responsibility of his own, his lawyers said. They assigned immoderate of the blasted to 1 of his employees, his erstwhile paramour Caroline Ellison, and said she failed to instal safeguards. Ellison has already pleaded blameworthy and volition attest during the trial.
Bankman-Fried’s transgression proceedings connected fraud and conspiracy charges kicked disconnected Wednesday astatine 12:30 p.m. successful New York with adjunct U.S. lawyer Nathan Rehn telling the 12-person jury that the authorities would present grounds and adept witnesses that would beryllium the erstwhile crypto king “lied to his customers” and utilized their wealth to bargain himself “money, powerfulness and influence.”
"He poured wealth – different people's wealth – into investments,” Rehn said. He “spent that wealth successful each sorts of ways connected himself.”
Bankman-Fried’s lawyers argued successful their opening connection that the erstwhile laminitis of FTX and Alameda Research ne'er meant to bargain customers’ wealth – helium was simply overwhelmed by the velocity astatine which some his businesses grew.
“He did not mean to bargain from anyone,” said the defense’s pb lawyer, Mark Cohen, to jurors selected earlier Wednesday.. He besides said that Bankman-Fried “acted successful bully faith” and that helium “didn’t defraud anyone.”
The FTX app and presumption of work some told customers that the wealth they enactment connected the speech was being kept for them "as if they were sitting close there" – but, successful reality, Bankman-Fried diverted those funds to "smaller and secretive company" called Alameda Research and spent them connected “luxuries” for himself, his friends and household members, Rehn told the court. In addition, Bankman-Fried utilized the wealth to marque governmental donations that allowed him to curry favour with almighty radical connected Capitol Hill, helium said.
“You volition larn the suspect took billions of dollars from… accounts [holding customers’ funds]…and helium spent it, and customers had nary mode to know,” Rehn said.
Bankman-Fried took much than $10 cardinal retired of FTX to wage its sister institution Alameda Research’s debts successful May and June of 2022, and attempted to “orchestrate a screen up” by ordering the instauration of mendacious fiscal statements, Rehn added. He besides testified earlier congress, alleging FTX had ne'er stolen customers' funds, helium said.
However, that “lie” blew up erstwhile Alameda’s fiscal statements were “leaked online,” Rehn said, referencing CoinDesk’s award-winning reporting connected an interior papers from Alameda that acceptable into question FTX’s illness past fall.
Still, Bankman-Fried attempted to “cover his tracks,” tweeting mendacious reassurances to his customers, instructing his employees to acceptable up his company’s interior communications platforms to car delete messages betwixt him and his employees and falsifying contracts and different documents, Rehn said..
The DOJ plans to contiguous documents, capitalist files, fiscal statements and Bankman-Fried’s ain deleted tweets during the people of the trial, successful summation to witnesser testimony, helium said.
Cohen started his opening statements by asking the jurors to justice “based connected existent beingness experiences,” and that helium volition explicate “what truly happened,” moments aft Rehn presented the prosecution's opening argument. The Assistant U.S. Attorney told jurors that the erstwhile crypto mogul “lied to the world.” and “stole money” portion continuously promising customers that their assets connected FTX were safe.
The defence claimed that the authorities was “taking things retired of context.” Rather than being a thief, Bankman-Fried was “someone who worked truly hard” and whose companies grew precise rapidly wherever hundreds of decisions had to beryllium made each day, Cohen said.
“No CEO and surely not Sam could beryllium anyplace and bash everything,” Cohen said.
The authorities besides told jurors astir however intimately intertwined the supposedly abstracted entities Alameda Research and FTX were and that Bankman-Fried, adjacent aft helium stepped down from his relation arsenic CEO, remained precise progressive successful Alameda Research’s concern decisions.
The defence said there’s “nothing incorrect with that,” and that Bankman-Fried remained a bulk proprietor successful Alameda, which is wherefore helium continued to beryllium highly involved. He besides explained that FTX needed liquidity and that Alameda Research took connected the relation arsenic the marketplace maker.
“Totally normal,” Cohen said.
The defence took a changeable astatine the government’s cardinal witnesses – Ellison and erstwhile FTX executives Gary Wang and Nishad Singh – saying they were testifying owed to practice agreements.
“Cooperation successful the existent satellite means testifying successful a mode that supports the government’s case,” Cohen said. “That should overhang everything they say.”
In the months starring up to trial, Bankman-Fried’s lawyers person said they would reason that the erstwhile crypto mogul acted successful "good faith" erstwhile helium loaned funds to FTX and Alameda executives and successful nary mode meant to defraud customers, investors oregon lenders.
Both the defense’s and the prosecutor's opening statements came aft Judge Kaplan picked a assemblage of 12 individuals to travel the lawsuit connected Wednesday. Those jurors were selected from a radical of implicit 80 prospective jurors that appeared successful tribunal connected Tuesday and were asked a assortment of questions, some enactment related and personal.
Before the DOJ took the stand, Judge Kaplan work a acceptable of preliminary instructions to the assemblage for astir 20 minutes, reminding the 12 jurors and six alternates not to behaviour immoderate research. He besides explained however they should measure grounds and measurement it against, and alongside, different grounds similar the FTX and Alameda’s interior documents. Opening arguments did not number arsenic evidence, helium said, likening them to movie trailers.
“Your occupation is to determine the facts…to travel to a decision astir what happened,” Kaplan told the jurors, aboriginal adding that helium volition thatch them everything they request to cognize astir the instrumentality and however to use it to scope a verdict.
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