The long-awaited Sam Bankman-Fried trial has officially begun.
Prosecutors and defense attorneys presented conflicting narratives during the opening arguments on October 4th, setting the stage for a trial that promises to unravel details about the controversial collapse of FTX.
In a courtroom in New York, both sides introduced their cases in front of a 12-member jury. This move came after Judge Lewis Kaplan had finalized the jury selection process, which involved questioning nearly 50 candidates over a day.
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Assistant US Attorney Thane Rehn led the prosecution, while defense attorney Mark Cohen represented Sam Bankman-Fried, also known as SBF.
Rehn argued that SBF had been deceitful in his dealings within FTX and the broader public. During the hearing, the US Attorney told the jury:
The hole was too big. So the defendant blamed a downturn in the crypto market. But he had committed fraud. That is what the evidence in this trial will show. You will hear from his inner circle. His girlfriend will tell you how they stole money together.
He further contended that SBF used FTX customer funds for personal gain and political influence, alleging that campaign donations and testimonies were aimed at portraying a false image of trustworthiness.
On the other hand, Cohen presented a different narrative. He suggested that the turmoil leading to FTX's collapse resulted from actions taken by Caroline Ellison, SBF's ex-girlfriend and former CEO of Alameda Research.
Additionally, Cohen laid some blame on Changpeng Zhao, the CEO of Binance, asserting that his social media activity fueled a panic run on FTX. Moreover, Cohen noted:
Alameda took big margin loans from FTX. Nothing wrong with that. Alameda was a market maker. Nothing wrong with that. FTX at first didn’t have a bank account to accept dollars, which in the crypto world are called fiat. So, they used an Alameda account.
He also portrayed SBF as someone who "acted in good faith" in a rapidly evolving and volatile crypto market.
The second day of the trial saw SBF appearing with a new hairstyle, adding a humanizing touch to the high-profile case. Notably, Caroline Ellison and other former associates might appear as witnesses against him as the trial unfolds.
SBF, who has pleaded not guilty to seven fraud-related charges, is slated for a second trial in March 2024. The current trial is estimated to last around six weeks.
As the trial against Sam Bankman-Fried proceeds, the contrasting opening arguments lay the groundwork for a legal battle that could have wide-ranging implications for the cryptocurrency industry. With both sides presenting differing accounts of the events leading up to FTX's downfall, the jury now faces the complex task of deciphering the truth.
