Sam Bankman-Fried Goes on Trial Tomorrow
It is officially trial week, everyone – or as Bloomberg’s Joe Weisenthal would likely put it, “this is why we get up in the morning.” It’s been exactly nine months and 20 days since Sam Bankman-Fried got arrested at his then-home in the Bahamas. Today marks the last day before he is set to start the trial in which he will win back his freedom – or be locked up for what a federal judge says could be a “very long” time.
Welcome to The SBF Trial, a CoinDesk newsletter that brings you daily insights from inside the courtroom where Sam Bankman-Fried will try to fight off prison. Whether he wins his freedom or faces a lengthy sentence, this trial is defining and consequential. If you want to stay updated, sign up here to receive this newsletter directly.
The Battle Inside the Courtroom
In the following six weeks, the courtroom will be filled with thousands of pages of evidence, including internal documents and audio recordings, as U.S. prosecutors aim to prove that the former FTX founder, Sam Bankman-Fried, knowingly defrauded customers and business partners. However, perhaps the most crucial evidence could surface from the accounts and personal opinions of those who were close to Bankman-Fried - his former colleagues, friends, and housemates,
Caroline Ellison, Nishad Singh, and Gary Wang not only worked alongside Bankman-Fried but also shared personal connections with him. Ellison, emotional and troubled by her on-and-off relationship with the FTX founder, mentioned in her diary entry that their relationship slowly faded away in February 2022.
Additionally, prosecutors have revealed their intention to call up FTX customers and investors, including non-U.S. customers, to testify during the trial, further strengthening their case against Bankman-Fried.
A Cryptocurrency Mystery Unraveled
Let's turn the spotlight to a different aspect of this trial. Remember when FTX announced it was hacked and lost around $600 million worth of crypto? Coincidentally, that same day, the company filed for bankruptcy in November. Recently, a significant portion of those funds, around 15,000 ether valued at approximately $26 million, started moving through various routers and privacy tools between Friday night and Sunday morning.
The movement of these funds remains unexplained, leaving many curious as to how such an exploit occurred. One can only imagine that federal investigators are meticulously following this event.
The Defense Strategy
Judge Lewis Kaplan made a ruling in favor of the DOJ's motion, preventing Bankman-Fried from discussing his lawyers' statements regarding FTX's operations in his opening statement. Although this limitation may seem like a setback, Bankman-Fried's defense team still has the opportunity to raise the "advice-of-counsel" defense later on, provided they notify the court and DOJ.
In their defense filings, Bankman-Fried's legal team revealed that they will argue that the decisions involving the use of auto-deleting messaging platforms, the establishment of legal entities in the U.S., loaning funds to FTX and Alameda executives, and other aspects of the FTX/Alameda relationship were made in consultation with both in-house and external lawyers.
The Trial Begins
Voir dire proceedings are scheduled to begin at 9:30 a.m. ET tomorrow. Stay tuned as we bring you the latest updates from the courtroom.
