The trial of Bankman-Fried, the previous CEO and co-founder of collapsed crypto alternate FTX, is coming into its subsequent chapter as proceedings resume Thursday. As confirmed throughout a teleconference Wednesday, SBF will be taking the stand, together with a handful of different witnesses because the onus shifts towards the protection after the prosecution introduced its case to its conclusion.
As former federal prosecutor Josh Naftalis informed TechCrunch, SBF taking to the stand in his personal trial is a “Hail Mary” forward of a verdict and potential sentencing for seven counts tied to fraud and cash laundering.
“As soon as it goes to cross[-examination], he doesn’t get to say, ‘I’m completed,’” Naftalis mentioned. “He can’t simply stroll out if he doesn’t like the way it’s going.”
Naftalis spoke at size about what comes subsequent within the trial, and addressed frequent misconceptions concerning the prosecution and protection within the newest episode of TechCrunch’s Chain Response podcast, which you’ll be able to take heed to under, or on Apple Podcasts or Spotify.
The SBF trial is among the largest instances of its variety throughout the crypto house. Our resident crypto expert Jacquelyn Melinek has been on the bottom on the trial because it began, and continues to cowl the ins and outs of the proceedings. However the trial has been on pause from October 20 to immediately, so there’s loads to atone for in case you want a refresher forward of it coming into its ultimate few phases.
For these in want of a complete refresher on the case, her breakdown of how FTX went from the third-largest crypto exchange valued at a peak of $32 billion to chapter will get you in control.
You can even comply with alongside along with her and the TechCrunch staff’s protection within the Chain Reaction newsletter, which drops Thursdays at 12 p.m. PT, and the Chain Reaction podcast, which can hit your feed each Thursday.
How you can comply with the SBF trial
The trial kicked off with jury selection October 3. From there, entry to the proceedings is proscribed, as no units are allowed; reviews are being bodily put collectively throughout the courtroom (or despatched to overflow rooms).
Past our every day protection, further experience and commentary will stay on TechCrunch+. There, you could find tales like this in-depth breakdown of what to expect from both sides of the SBF case, the place the prosecution and protection might acquire floor or fall quick of their arguments and what the takeaways were from the opening arguments.
SBF trial: What we discovered in week three
The third week of the trial featured a few noteworthy moments for the prosecution, including FTX’s former general counsel Can Sun. He, like lots of SBF’s former colleagues, opted to cooperate with authorities and testified that SBF requested him to create a theoretical “authorized justification” for using billions in shopper funds simply days earlier than FTX filed for bankruptcy.
Robert Boroujerdi, managing director of the hedge fund Third Level, testified about his experience working with SBF and FTX, in a partnership that in the end resulted in a $60 million funding and a ignorance concerning the particular relationship between Alameda Analysis and FTX. Had he recognized of such a relationship, he testified that Third Level wouldn’t have invested in FTX within the first place.
And earlier within the week, a College of Notre Dame professor who helped the federal government prosecution of Enron and WorldCom, Peter Easton, testified about what he uncovered after tracing the flow of billions of dollars between Alameda Research and FTX. A lot of mentioned funding got here from clients, and Easton testified that he discovered that person deposits have been utilized by each FTX and Alameda to buy actual property, make investments or direct funding towards political causes and charities.
SBF trial: What we discovered in week two
The second week of the trial’s standout testimony came from Alameda Research’s former CEO Caroline Ellison, who claimed she took $14 billion from clients to repay money owed to lenders, utilizing them as a line of credit score beneath the instruction of SBF. Ellison also went into detail about how a $2 billion venture fund, FTX Ventures, was funded by cash that had beforehand been allotted to Alameda from third-party lenders.
And although there aren’t any expenses of bribery within the case, Ellison also testified to paying Chinese officials $150 million to revive entry to $1 billion in frozen buying and selling accounts.
SBF trial: What we discovered within the week one
As anticipated, the opening statements within the SBF trial have been spicy. The prosecution painted an image of an empire “constructed on lies” and made a degree to indicate precise photos of SBF alongside wealthy and highly effective figures as an example the height of his energy and affect previous to FTX’s implosion.
“This man stole billions of {dollars} from hundreds of individuals,” prosecutor Thane Rehn informed the courtroom. “He defrauded subtle buyers and lenders, and he emptied the accounts of strange clients, too. He purchased himself wealth, energy and affect.”
The protection, however, depicted SBF and his colleagues as in over their heads, with out ill-will as FTX collapsed round them.
“Sam and his colleagues have been constructing the aircraft as they have been flying it,” protection legal professional Mark Cohen mentioned. “They’d to determine learn how to navigate a world the place they have been operating FTX, constructing out its programs, coping with hacking threats, managing the credit score danger of their clients, managing a whole bunch of workers, all whereas increase their precise alternate.”
Read a recap of the prosecution and defense’s full arguments here.
FTX’s co-founder and CTO Gary Wang testified Thursday on the extent to which Alameda Analysis was used for no matter functions he and SBF noticed match. The crypto buying and selling agency, in line with Wang, pulled funding immediately from FTX clients, whose transactions can be funneled towards Alameda after which directed elsewhere.
Check here for our rundown of Wang’s testimony so far, ensuing from a responsible plea in December 2022.
Thursday additionally introduced in testimony from Matt Huang, co-founder and managing companion at crypto funding agency Paradigm. That agency invested $278 million in FTX throughout 2021 and 2022, and is a part of a class-action lawsuit accusing it and others of defrauding clients by selling FTX.
His testimony centered round being left uninformed about FTX’s utilization of buyer cash to maintain the Alameda Analysis afloat, a follow that Huang says would have halted his involvement. The complete breakdown of his testimony on his relationship with FTX, stretching again to 2019, can be found right here.
We additionally acquired a take a look at the composition of the SBF trial’s jury, which ranges from a practice conductor to a retired funding banker who attended Stanford College. You possibly can take heed to a special joint episode of our podcasts Equity and Chain Reaction to get a greater sense of the vibe between the jurors and the remainder of the courtroom.
For a full rundown of our protection of the SBF trial, examine under:
