The trial of FTX co-founder Sam Bankman-Fried (SBF) has begun, with both prosecutors and defense lawyers giving their opening statements. SBF’s lawyer, Mark Cohen, argued that his client did not defraud anyone and instead blamed Binance CEO Changpeng Zhao (CZ) for causing a “run on the bank at FTX.” Cohen maintained that SBF acted in good faith and did not steal from anyone, believing that loans made from FTX to hedge fund Alameda Research were permitted.
According to prosecutors, Bankman-Fried secretly arranged for customers’ fiat and crypto deposits to be taken and used at Alameda. It is alleged that fiat was stolen by allowing customers to deposit money into a bank account at Silvergate that actually belonged to Alameda, not FTX. Meanwhile, crypto was taken from FTX customers’ accounts using a hidden backdoor within FTX’s computer systems.
Cohen argued against the portrayal of SBF as a “cartoon villain” and described him as a math nerd who did not engage in excessive partying or drinking. He claimed that the Alameda account at Silvergate was created for FTX’s use because FTX did not have an account for accepting dollars in its early days. However, poor risk management led to Bankman-Fried mistakenly thinking that this money could be lent out like Alameda’s other assets.
Bankman-Fried’s girlfriend, Caroline Ellison, played a role in the case. Bankman-Fried relinquished his CEO position at Alameda to Ellison in 2021. Prosecutors argue that he was still calling the shots at Alameda, but Cohen stated that Ellison’s failure to heed Bankman-Fried’s advice during the bear market is what caused the lender to go bankrupt. Losses at Alameda made Bankman-Fried believe that the fund’s bank accounts no longer held FTX client funds.
Cohen argued that Bankman-Fried continued to believe that both Alameda and FTX were solvent during the market downturn until CZ’s tweet sparked concerns about the firms. This triggered a “run on the bank at FTX,” according to the defense.
Ellison, along with two other executives close to Bankman-Fried, have already entered plea deals admitting to fraud in conspiracy with SBF.
The trial will continue, and the defense will ask the jury to find Bankman-Fried not guilty..
#BankmanFrieds #Lawyers #Blame #ExGirlfriend #FTXs #Collapse
According to prosecutors, Bankman-Fried secretly arranged for customers’ fiat and crypto deposits to be taken and used at Alameda. It is alleged that fiat was stolen by allowing customers to deposit money into a bank account at Silvergate that actually belonged to Alameda, not FTX. Meanwhile, crypto was taken from FTX customers’ accounts using a hidden backdoor within FTX’s computer systems.
Cohen argued against the portrayal of SBF as a “cartoon villain” and described him as a math nerd who did not engage in excessive partying or drinking. He claimed that the Alameda account at Silvergate was created for FTX’s use because FTX did not have an account for accepting dollars in its early days. However, poor risk management led to Bankman-Fried mistakenly thinking that this money could be lent out like Alameda’s other assets.
Bankman-Fried’s girlfriend, Caroline Ellison, played a role in the case. Bankman-Fried relinquished his CEO position at Alameda to Ellison in 2021. Prosecutors argue that he was still calling the shots at Alameda, but Cohen stated that Ellison’s failure to heed Bankman-Fried’s advice during the bear market is what caused the lender to go bankrupt. Losses at Alameda made Bankman-Fried believe that the fund’s bank accounts no longer held FTX client funds.
Cohen argued that Bankman-Fried continued to believe that both Alameda and FTX were solvent during the market downturn until CZ’s tweet sparked concerns about the firms. This triggered a “run on the bank at FTX,” according to the defense.
Ellison, along with two other executives close to Bankman-Fried, have already entered plea deals admitting to fraud in conspiracy with SBF.
The trial will continue, and the defense will ask the jury to find Bankman-Fried not guilty..
#BankmanFrieds #Lawyers #Blame #ExGirlfriend #FTXs #Collapse
