Cryptocurrency: ‘Lies’ versus ‘good intentions’ in Sam Bankman-Fried’s trial

As arguments in the trial of cryptocurrency fallen angel Sam Bankman-Fried begin on Wednesday, October 4, a trajectory built on “lies” or outright “good faith” management, has Two visions of the same character pitted against each other in New York.

Prosecutor Thane Rehn, representing the prosecution, said in his introductory remarks that SBF, as he was nicknamed, “had wealth and power” but it was all “based on lies”. Deputy U.S. Attorney Damian Williams from Manhattan maintains that for prosecutors, the former cryptocurrency darling committed the crime by “stealing” funds from customer accounts on his FTX trading platform. A “massive fraud” was committed. Thane Rehn said that “he took customer funds and spent them on his own accounts” and that FTX users had “no way of knowing” how their money was being used.

The 30-year-old man was charged with seven counts, mainly involving fraud, corruption and criminal gangs. If convicted, he faces more than 100 years in prison.

“Hundreds of decisions every day”

In November 2022, the cryptocurrency exchange imploded and was unable to respond to large-scale withdrawal requests from customers. It was panicked to learn that some of FTX’s funds had been engaged in risky operations by “SBF” hedge fund Alameda.

“Sam didn’t deceive anyone,” responded Mark Cohen, one of the defendants’ attorneys. “There was no theft.” The board acknowledged that FTX funds had been used by Alameda, but assured that it was a matter of putting the funds to use and not of misappropriation. He repeatedly used “integrity” to describe the behavior of customers when he was in charge of FTX.

“Sam had to make hundreds of decisions every day” to guide the startup’s rapid growth, the lawyer explained. “The result is that certain things are overlooked,” particularly risk management, Mark Cohen said.

His ex-girlfriend was charged

As expected, he implicated Sam Bankman-Fried’s ex-girlfriend Caroline Ellison, who put her in charge of Alameda. According to him, she will not follow the advice of the “SBF”, which advises her to use financial instruments to hedge against possible declines in the cryptocurrency market.

But to prosecutors, Sam Bankman-Freed “acted as if he was no longer in charge of Alameda, which is not the case,” Tarn Lane said, while Carolyn Ellison Just his “nominee”.

Caroline Ellison, who was also implicated, pleaded guilty to seven counts in December and agreed to cooperate with federal prosecutors in Manhattan. Thane Rehn said on Wednesday that, as expected, the young woman will testify during the trial and will tell at this hearing “how she and the defendant stole money from FTX customers.”