Who would have thought an individual who was once hailed as ‘The White Knight of Crypto’s would end up as a criminal in fraudulent activities? Probably, no one. On November 11th, 2022, the shock waves took over the crypto landscape when FTX filed for bankruptcy and Sam Bankman resigned as chief executive. The shock waves were just fading away, but the news of Sam Bankman’s arrest came out in mid-December. This news became a top world headline, resulting in countless debates. US Justice Department arrested Bankman-Fried in the Bahamas on seven different charges of money laundering and wire fraud activities. In the US District Court, Bankman-Fried pleads guilty during January 3rd- 12th, 2023. Judge Lewis Kaplan scheduled Sam Bankman-Fried’s courtroom trial for October 2023.
Day 1 of Sam Bankman-Fried’s Courtroom Trial (Recap):
Day 1 of Sam Bankman-Fried’s courtroom trial was started in New York’s lower Manhattan at Daniel Patrick Moynihan Courthouse on 500 Pearl Street. This trial is probably the biggest court trial since Amber Heard-Johnny Deep’s one.
The Bankman-Freid’s legal trial began at 10:00 AM with jury selection. Lewis A. Kaplan, the senior district judge, presides over this case. Nicolas Roos, the assistant U.S. Attorney, is leading the prosecution. In the defense of Sam Bankman-Fried, Mark Cohen has come forward.
Key Points to Remember in Trial:
I. Judge Lewis A. Kaplan clarified that Bankman Fried is firstly charged with defrauding customers and then defrauding FTX investors.
II. Micheal Lewis’s 60 Minutes Interview to promote his new book, ‘Going Infinite,’ based on the Sam Bankman-Fried, is making headlines all over the globe. The interview, as well as the book, are the perfect example of brainwashing. The whole interview and book are in defense of Bankman-Fried. However, the issue is four of the jurors have watched this interview.
III. Moreover, one of the seven jurors works for a company that has invested in FTC. And one juror worked at Silvergate Bank, a crypto-based one, which also has some indirect links with FTX.
IV. The case is bound to become a historic financial scandal as Trabucco, Celsius, Genesis, BlockFi, Silvergate, Signature Bank, and Skybridge are hinted to have potential involvement in the trial.
V. Judge Kaplan has prohibited all jurors from making any public statements and reading any reports, posts, or news about the case.
If you want to know about Sam Bankman-Fried’s history as a crypto king and all his scandals in detail, make an effort to read our previous blog post. Click here
Day 2 of Sam Bankman-Fried’s Courtroom Trial (Recap):
The legal trial of Bankman-Fried resumed at 10:00 AM. Around 11:20 AM, the Judge announced 12 jurors and six alternate jurors. The opening statements of the defendant took 40 minutes, while prosecutors took 25 minutes.
Prosecutor’s Opening Statement:
Assistant U.S. Attorney took a dig at Sam Bankman by saying, he has built his entire crypto empire at FTX, but, in reality, it’s not.
The prosecutor alleged Bankman Fried for using FTX funds to make political donations in elections and celebrity endorsements.
AUSA also said that Sam Bankman opened fake bank accounts and, through Alameda’s unrestricted access, stole FTX customer deposits.
He ends the statement by stating, ‘There is only one verdict: Sam Bankman-Fried is guilty.’
Statement of Bankman-Fried’s Lawyer:
Mark Cohen, SBF’s lawyer, starts his statement by saying Mr. Bankman-Fried didn’t defraud anyone.
Cohen also blamed Bankman Fried’s girlfriend, Caroline Ellison. Furthermore, he also alleged Caroline didn’t follow Bankman’s advice on how to keep Alameda’s funds safe.
He claimed Twitter attacks from Binance and its CEO were the reason behind FTX losing multi-billion dollars.
Cohen tried to represent Bankman Fried as a good character who overlooked the mismanagement of FTX but didn’t commit any fraudulent activities.
Partial Answers to Some Primary Questions During Sam Bankman-Fried’s Courtroom Trial:
Day 2 trial involved statements from both parties, which led to the emergence of some serious questions. Its partial answer was somehow hidden in the statements of the defendants.
Q-1. FTX Collapse: Fraud or a Smear Job?
Defense lawyer Mark Cohen said the Bahamas-based FTX was a casualty of a broader downturn across the cryptocurrency sector, and public attacks from Rivals such as Binance and the crypto press led to the run on FTX.
While prosecutors said, ‘That was an excuse for fraud.’
Q-2. FTX’s relationship with Alameda: Nefarious or Normal?
The prosecutors alleged that Bankman-Fried stole customer funds in two ways:
By dumping FTX customers into sending money intended for their trading accounts to Alameda Through a secret specialprivilege embedded in FTX software that let Alameda make unlimited withdrawals
In defense, Cohen said prosecutors had misconstrued instances of Alameda performing functions for FTX and disagreed thesoftware was nefarious.
Q-3. Caroline Ellison: Failed Deputy or “Front”?
The prosecution and defense also clashed over the role of Caroline Ellison, Alameda’s chief executive and Bankman-Fried’s on-and-off romantic partner.
Whether she is to blame for some of the wrongdoing or just a front for Bankman-Fried to carry out his actions at Alameda research, the prosecutors are expected to call Ellison and two former members of Bankman-Fried in the circle Executives Nishad Singh and Gary Wang to testify against him.
However, all three have pleaded guilty and agreed to cooperate with the prosecutor. The jurors can expect to hear from the names in the trials at the end of this week.
Schedule of Next Trials:
October 5th, 2023 to October 6th, 2023
October 10th, 2023 to October 13th, 2023
October 16th, 2023 to October 19th, 2023
October 26th, 2023 to October 27th, 2023
October 30th, 2023 to November 2nd, 2023
November 6th, 2023 to November 9th, 2023
During Day 1 of jury selection, the Judge made it clear the case will not take months for final decision. Therefore, we can expect the court’s decision in the upcoming weeks only.
Day 3 of the trial is scheduled tomorrow at 10:00 AM. It is estimated prosecutors will raise some debates on additional charges against Sam Bankman-Fried. Moreover, it can be expected to see some witnesses in a courtroom. Whatever may happen inside the courtroom, Coin Informer will tell you all. So, stay tuned for our next news article.