The first week of Sam Bankman-Fried trial begins

74
3
The first week of Sam Bankman-Fried trial begins

The trial of Sam Bankman-Fried is being held in a packed New York courtroom. During the first week of the trial, the disgraced FTX founder kept his eyes fixed on his laptop as some of his best friends testified against him.

On Tuesday, another person once close to Bankman-Fried is set to take the stand for the prosecution: Caroline Ellison, the ex-chairman of Bankman-Fried's hedge fund and his on-again, off-again girlfriend.

Ellison's testimony has been called one of the most crucial moments of the trial, and is likely to put Bankman-Fried's lawyers on their back foot as they attempt to fend off a flurry of damning allegations amid what many are calling the 'trial of the decade'. What are the highlights of this week?

On the first day of the trial, Bankman-Fried's famous mop of unruly curls-so distinctive that his employees once thought that a planned headquarters in the Bahamas should resemble his hair-was shorn.

He watched jury selection take up Tuesday and part of Wednesday morning, as the prosecution and defense eventually settled on a diverse cast of 12 jurors and six alternates, including a retired 68-year-old investment banker and a 50-year-old train conductor.

Then, lawyers for the government and defense opened the case and presented two stories of two very different Bankman-Frieds.

The government's first four witnesses were evenly split: two victims and two close confidants.

The victims were Marc-Antoine Julliard, a French cocoa bean trader who lost over $100,000 in bitcoin and cash when FTX collapsed, and Matt Huang, the cofounder of the venture capital firm Paradigm, who invested $278 million in the failed crypto exchange. When asked what the value of the nearly $300 million investment in FTX is, Huang said, it is about $US$300 million.

However, the two Bankman-Fried confidants provided more damning evidence of his alleged fraud.

The first was Adam Yedidia, one of Bankman-Fried's best friends at MIT who later worked as a senior developer at FTX. Yedidia testified that he had a fateful conversation with the former FTX CEO, Bankman-Fried, in June 2022, when FTX was 'not bulletproof', in reference to Alameda's growing debt to the crypto exchange.

Bankman-Fried lawyers haven't finished their cross-examination of Wang, and when the trial resumes on Tuesday they will continue peppering him with questions. The U.S. District Judge Lewis Kaplan, who is presiding over the case, has repeatedly lambasted the defense for asking repetitive questions.

When Wang's time on the stand is over, the government said it will call Ellison's star witness, Mr. Ellison, to the stand.

The former CEO of Alameda, which prosecutors have argued was the key entity that facilitated the misuse of FTX's customer funds. In both of their opening statements, the government and lawyers of Bankman-Fried repeatedly referenced Ellison.

After Ellison, the government still has one more key lieutenant to call to the stand: Nishad Singh, an FTX cofounder and close friend of Bankman-Fried's younger brother. It is not clear when, or if, he will testify, but we're just one week into what prosecutors have estimated will be a six-week-long trial. The government also identified Ryan Salame and Sam Trabucco, other highly-regarded FTX and Alameda executives, as potential witnesses.

For now, all indications suggest that Ellison is likely to deliver a number of bombshell allegations against Bankman-Fried, and that more sparks will fly.