Day 2 of Sam Bankman-Fried’s trial: 5 things you should know

The jury has heard opening statements from the prosecution and the defense, as well as some witness testimony

article-image

Artwork by Crystal Le

share

Wednesday commenced the second day of Sam Bankman-Fried’s trial. He stands accused of seven counts of fraud and conspiracy, including wire fraud and conspiracy to commit money laundering. 

The prosecution and the defense both delivered their opening statements following the selection of a jury. Here’s what you need to know:

1. The prosecution wants the jury to believe Bankman-Fried is the villain

Prosecutor Thane Rehn spoke at the podium and told the jury that one year ago, Bankman-Fried was on top of the world. 

He hobnobbed with celebrities like Tom Brady — whose commercial endorsing FTX was later shown to the jury — and politicians like former President Bill Clinton. He was wealthy, and he had a lot of power and influence, Rehn said. 

All of that was built on lies,” Rehn concluded. 

All while he was living his best life from 2019 to early 2022, Bankman-Fried was knowingly and actively stealing FTX customer money, Rehn claimed.

That money was spent on real estate in the Bahamas, political donations, and perhaps most crucially, used to pay off outstanding loans to creditors of Alameda Research, his crypto hedge fund, according to the prosecution.

2. The defense says the state’s conception of Bankman-Fried is “cartoonish”

Mark Cohen, Bankman-Fried’s attorney, described his client far differently than the jet-setting, beachfront property-owning criminal that the government believes him to be. 

“Sam,” as Cohen referred to Bankman-Fried, is just a “math nerd who didn’t drink or party,” he told the jury. 

Bankman-Fried “didn’t defraud anyone” or “intend to defraud anyone,” Cohen added.

Read more: Sam Bankman-Fried ‘lied to the world,’ prosecution posits in opening statement 

Instead, he acted in “good faith,” executing sound business decisions prior to and during the collapse of FTX – which Cohen alluded to as the “storm” – that were reasonable at the time. 

3. Bankman-Fried’s friend turned foe 

The government’s second witness – former FTX developer Adam Yedidia – may have come as a disappointing shock to Bankman-Fried, who once again appeared in court in an apparently oversized suit. 

Yedidia, Bankman-Fried’s former college roommate and “close friend,” told jurors he quit his position at the exchange in early November 2022 after another co-worker told him that FTX customer funds had been used to repay Alameda creditors. 

Yedidia was offered immunity in exchange for his cooperation with the prosecution and truthful testimony. The government will continue their questioning of Yedidia and the defense will have the opportunity to cross-examine on Thursday. 

4. The state accuses Bankman-Fried of being secretive

It’s not just the allegation that Bankman-Fried stole from his customers that concerns the prosecution. It’s that he allegedly tried to engage in a cover-up to conceal potential crimes. 

Don’t feel left out. Keep up with news from Sam Bankman-Fried’s trial.

Rehn claimed that the former FTX CEO “secretly” gave Alameda “special access” to money individuals had put into FTX accounts. As part of FTX’s code, Alameda was granted “unlimited withdrawals” from the exchange, Rehn alleged. 

This claim is the bedrock of the state’s case against Bankman-Fried: that he covertly stole money without his customers’ consent. 

5. What to expect going forward

Now that the second day of trial is in the books and witness testimony has begun, the government will be in the driver’s seat for much of the trial going forward. The next two witnesses for the government are former Sequoia partner Matt Huang and co-founder of FTX Gary Wang. Their testimony is expected to last until the end of this week.

As the judge explained to the potential jurors during jury selection and now the assembled jury during trial, the burden of proof is on the state. Therefore, the state will be calling witnesses first. Of course, the defense has the right to cross examine them to try to poke holes in their testimony.

The defense is under no obligation to call witnesses and can simply rest after the prosecution finishes presenting evidence. However, they can present their own evidence if they so choose.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screenshot 2024-05-23 091855.png

Research

Bitcoin L2s aim to boost scalability while preserving decentralization and security, unlocking a better user experience, and new avenues for Bitcoin-powered innovations. However, no existing Bitcoin L2 leverages the full security of Bitcoin.

article-image

Sponsored

As part of the #Breakout2024 plans, Radix has introduced Token Trek

article-image

House members ask Gensler to keep a “consistent and equitable approach” with ether ETF proposals after the agency approved spot bitcoin ETFs in January

article-image

Using old-world instruments to address crypto user experience challenges goes against what this industry set out to do

article-image

And, weeks of a potential crypto ETF decision are no stranger to chaos

article-image

The FIT21 Act marks the second crypto-focused piece of legislation to advance in Congress this month

article-image

More than half of Solana transactions fail