Contrasting portraits of FTX founder in court

Prosecutors called Sam Bankman-Fried a greedy, villainous businessman, but the FTX founder's lawyer painted a different picture.

On October 4, Sam Bankman-Fried (SBF), former CEO of digital currency exchange FTX, appeared in Manhattan federal court, New York to begin the trial.

"The former CEO of FTX is noticeably thinner. He wears an oversized suit. No longer has his signature messy curly hair, instead he has a neatly cut hairstyle," Cointelegraph described. Meanwhile, Unchained Crypto found SBF less restless than usual. "I didn't see him shake his legs at all. The only time he responded to the jury, the founder of FTX said: agree," the site said.

Sketch of Sam Bankman-Fried in court on October 4 with short hair. Photo: Reuters

"Villain businessman"

At the trial, the US Department of Justice (DOJ) took a tough stance against Bankman-Fried right from the first statements.

Lawyer Thane Rehn described SBF as a villainous, greedy businessman with an endless desire for wealth and power. "He is rich, has power and influence. But it is all built on lies , " Rehn said.

Rehn reiterated the US government's accusations that Bankman-Fried used the FTX exchange as his own "piggy bank". He is accused of taking money from customers to enrich himself and his family, spending recklessly on real estate, private hobbies and millions of dollars on lobbying campaigns in the US. The 31-year-old former CEO currently faces seven charges related to financial fraud conspiracy following the collapse of FTX.

"This man," Rehn pointed at Bankman-Fried a few meters away, "stole billions of dollars from thousands of people." DOJ representatives repeatedly emphasized the central argument that Bankman-Fried was someone who took advantage of others for personal gain, and lied to cover up his crimes.

"Hard-working billionaire, no partying"

While Rehn continued to accuse, Bankman-Fried kept his eyes on his laptop, not expressing any reaction to the prosecutor's accusations. But when his lawyer, Mark Cohen, stepped up to speak, Bankman-Fried's demeanor softened and his focus shifted to the jury box.

"SBF didn't defraud anyone. He tried to act in good faith throughout the company's ups and downs. He worked hard, was a nerd, liked math, and didn't drink or party." , Cohen told the court.

A person holding a sign "SBF is evil" stands outside the Sam Bankman-Fried trial in New York. Photo: Cointelegraph

Regarding the mistakes that led to the collapse of FTX and the Alameda hedge fund, Cohen argued that Bankman-Fried was like many entrepreneurs "flying the plane they built." When the cryptocurrency market fluctuated in 2022, that plane was "caught in a storm".

The FTX founder's lawyer also repeated some of the defenses Bankman-Fried has made over the past year, including that "everything happened too fast" and that the company did not have an adequate risk management team. Good. "Being the CEO of a company and then filing for bankruptcy is not a crime," he said.

When Caroline Ellison, SBF's ex-girlfriend, testified, Cohen told the jury that she had previously ignored Bankman-Fried's instructions to set up the necessary risk barriers. SBF also complained about this in leaked documents published by the New York Times . FTX founder believes Ellison cannot handle the job.

At the end of the first day of trial, Bankman-Fried pleaded not guilty. Meanwhile, several of his former colleagues have pleaded guilty and plan to testify against the former CEO.

The secret gradually unravels

Before the trial, some former FTX employees said Bankman-Fried used investors' money to spend recklessly on personal interests such as renting a plane to deliver goods online to all employees, and organizing parties. , buy real estate...

On the same day, October 4, data published by analytics company Nansen showed that the collapse of FTX was closely related to the Alameda fund established by SBF. Previously, SBF always claimed that Alameda and FTX operated independently, but statistics showed that both had suspicious asset transfers. For example, between September 28, 2022 and November 11, 2022, Alameda sent $4.1 billion worth of FTT tokens and $388 million worth of stablecoins to FTX.

These two companies also control 90% of the FTT supply and do not rule out the possibility of Alameda quietly selling FTT tokens and collateralizing the company's loans. When the market fluctuated, Alameda had liquidity problems.

Data on the blockchain also points to financial instability that prevented Alameda from being able to buy back $2 billion worth of Binance's FTT tokens at the $22 price range. This caused billionaire Changpeng Zhao to announce his withdrawal from the merger agreement on November 9, 2022, opening the door for FTX's chain collapse.

The trial of the founder of FTX took place from October 3 and is expected to end on November 9. According to CNN , Sam Bankman-Fried could face more than 100 years in prison if convicted. Meanwhile, legal experts assess that the collapse of FTX may be one of the most serious frauds in US history. About $8.9 billion in customer deposits and investment funds were blown away.