Highlights And Lowlights From The SBF Trial So Far
Sam's first week in court hasn't gone well. Worse is likely to come.
The trial of Sam Bankman-Fried is now into its second week of what is expected to be a six-week process.
The 31-year-old SBF is accused of various colors of fraud. His defense is that he was unaware of the worst of the offenses taking place at the exchange and trading firm he founded.
What's Happened So Far?
The jury that has been selected is diverse, and most do not come from Sam's world. There are nine women and three men, from many walks of life, of different ages (from early 20s to around 70) and different educational backgrounds. The only one with a background in finance is a former banker.
It's still early days, and some of the biggest developments are yet to come, but here are some of the most noteworthy points from the trial to date.
- SBF has lost weight, cut his hair, and is wearing a cheap suit—likely in an attempt to project a more humble and innocent appearance.
- His mother, Barbara Fried (herself accused of misappropriating funds), will not be a witness.
- Adam Yedidia, a former employee and close friend who been granted immunity by the prosecution in exchange for his truthful testimony, told the court that SBF knew FTX's bank account for customer deposits was owned by Alameda, his crypto hedge fund.
- Co-founder Gary Wang previously admitted on the stand that Alameda, enjoyed "special privileges", and was able to withdraw unlimited amounts of (customer) money from FTX.
- Presiding Judge Kaplan agrees with the DOJ that the lack of crypto regulation is not relevant in this case. (Fraud is fraud, no matter whether fiat or crypto was the vehicle to perpetrate it.)
- SBF's defense lawyers have not been scoring many points. Around 80% of questions to the prosecution were struck down for being misleading, with the judge sometimes sustaining an objection before it was requested.
- Some of the material in the case clearly isn't resonating with jurors. Discussions of code and bugs have gone over their heads. One witness was a trader who had lost $150,000 when FTX collapsed, a sum of money that is hard to grasp for someone earning minimum wage. It's a different world to them. Jurors have often appeared bored, and in one case, actually fallen asleep.
While there's another month of the trial left, at this point, it's not looking too good for Sam, who faces up to 115 years in jail.
Caroline Ellison, who could take the stand as early as today, will doubtless drop some bombshells. As SBF's former girlfriend and Alameda CEO, with intimate knowledge of FTX, and having cut a deal with prosecutors, it's entirely possible that her testimony will spell the end of him.
Per CoinDesk, "Ellison’s plea agreement waived her of any charges except criminal tax violations, provided she fully cooperated with the U.S. Attorney's office."
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