Sam Bankman-Fried’s cryptocurrency alternate FTX could have misplaced at the very least $8 billion in buyer cash, however he “didn’t intend to defraud anybody,” his protection group mentioned Wednesday throughout the opening arguments of his extremely anticipated trial. Although authorized specialists had lengthy speculated that Bankman-Fried, or SBF for brief, would take a “blame the attorneys” strategy, the protection painted an image of a enterprise chief appearing “in good religion” however introduced down by inexperience and the inherent volatility of crypto.
In October of final 12 months, Bankman-Fried, the MIT-educated son of two Stanford Legislation College professors, was one of many highest-profile CEOs on the planet. After founding FTX simply 4 years in the past, he constructed it into one of many world’s largest cryptocurrency exchanges, amassing billions and turning into an influence participant within the worlds of superstar and politics. In November, a series of investigations alleged that FTX had been funneling buyer cash to its sister firm, crypto hedge fund Alameda Analysis, after which utilizing that cash to make trades and for private functions, reminiscent of a $30 million penthouse within the Bahamas, political donations, and advertisements with celebrities together with soccer star Tom Brady.
In court docket Wednesday, the prosecution claimed that this was an act of deliberate fraud, however Bankman-Fried’s group tried to color the case as being about “the world of crypto world between 2017 to 2022.” Such losses, they insinuated, have been merely the price of buying and selling with the dangerous and unregulated digital forex. Moreover, argued Bankman-Fried’s lawyer Mark Cohen, the entire choices have been cheap, and weren’t proof of profligate spending or malicious intent.
Did clients who wished to make use of FTX must wire cash to a checking account (known as the “fiat account”) managed by sister firm Alameda Analysis? Sure, however this was crucial within the early days as a result of FTX didn’t have its personal checking account. Was it written into the code that Alameda might borrow an virtually limitless sum of money from FTX? Removed from being a secret, the protection claimed, this little bit of code was open and clear and “any senior developer at FTX” might see it.
Was SBF concerned in Alameda even after appointing new CEOs? Positive, however he additionally owned a lot of the firm, so in fact he’d have an interest. The thousands and thousands spent on the penthouse within the Bahamas and the promoting? That was to draw prime expertise and enhance the corporate, as any sensible businessperson would do.
Finally, Cohen mentioned, “it’s not a criminal offense to be the CEO of an organization that should fold for chapter.” In the meantime, SBF himself sat stoically the whole day in court docket, reacting neither to his protection group nor when the prosecuting lawyer pointed at him as the person who had defrauded hundreds of consumers. The trial continues.